Investec SIPP - no fees / 2.57% interest

lucasoid

I've been looking into this SIPP from Investec.

They have replied saying there are no charges for opening the account and no annual fee.

Does anyone have a SIPP with Investec?

Is there something I am missing as it seems a very good deal?

We are looking to move our pension with £26,000 in it and the cash account fits our low risk profile.
They seem to be FSA registered and cash is eligible for the FSCS.


Quote from their blurb:

Today’s indication rate for a 12-month Fixed Term Deposit (minimum £50,000) is 2.57% gross. Please note that our rates are subject to change and that we can only book the rate once we have received your funds. Further indication rates and term options are listed below.

Term

Gross*
6 Months
1.83%
12 Months
2.57%

18 Months
2.84%
2 Years
2.87%
3 Years
2.89%
4 Years
3.13%
5 Years
3.40%
http://www.investecprivatebank.co.uk/#home/deposits_and_banking_services/pension_and_trust.html+Fixed

Investec bank is listed on the FSA register below.

http://www.fsa.gov.uk/register/firmMainSearch.do

lucasoid

looking again, it's not actually a SIPP but an account you can use within your SIPP.

So if anyone can recommend a SIPP I can use this account with that would be great

Shimrod

I can't comment on the SIPPs, but if your figure of £26,000 above is correct (and you've not missed a zero) will you be able to use this cash account anyway? The bit you have cut and pasted states a minimum of £50,000.

Cautious_Investor_3

Hi

A SIPP using a Cash account such as Investec etc? The charges could well outweight the return you get from the deposit account.

It's always a pain in the neck trying to find cash rates for deposit accounts that a SIPP can open, this table does help though:

http://www.!!!!!!.uk/free-services/best-buy-savings-accounts/accounts-for-pensions/

Hope this helps, you fellow cautious investors!

The Cautious Investor

dunstonh

£26k in a SIPP is largely pointless as well. The charges will wipe out the benefit

the cash account fits our low risk profile.

Depending on your age, cash can actually increase the risk profile over the long term as it may not have investment risk but does have shortfall risk, inflation risk and provider risk.

lucasoid

If you have a SIPP which charges 0.5% per annum and can earn interest of 2.5% within it ...
How are the charges wiping out the benefit?

How is that largely pointless?

Cautious_Investor_3

lucasoid wrote: »

If you have a SIPP which charges 0.5% per annum and can earn interest of 2.5% within it ...
How are the charges wiping out the benefit?

How is that largely pointless?

Hi

From my experience the 'SIPPs' that charge 0.5% are actually only Personal Pension Plans dressed up as a SIPP, and only allow access to collectives.

The true SIPPs which will allow access to a variety of deposit accounts 9as well as other assets), for example SIPP Centre etc, charge fixed fees, which for a relatively small fund would work out much more than 0.5% per annum

The Cautious Investor

Gatser

...and without a paddle I fear!

I have some cash deposits (eg Scottish Widows Bank) within a SIPP.
However, the best SIPP I could find was HORNBUCKLE MITCHELL with charges of circa £500 pa (which=1.9% of £26k)... so it does not make sense to hold below (say) £100k in such a Cash Deposit biased SIPP.

Perhaps, as DUNSTON indicates, we would be better off to discuss other SIPP holdings that are not as expensive to hold in a SIPP as Cash appears to be (crazy!)

How about:
GILTS (low holding cost via SIPPDEAL)
ETF's
What other Funds are relatively low risk but offer modest returns?

Cautious_Investor_3

Hi

The problem is that fees on most of the really flexible SIPPS (i.e. that allow a wide variety of investments) are fixed as opposed to percentages of the amounts invested.

When interest rates were higher this was not an issue as cash investors simply went for a low cost personal pension (Winterthur's for example used to have a fee of £125 pa from memory) and invested in a range of cash / money market funds. However this is no longer viable due to (a.) some cash / money market funds making losses due as management charges outstrip low interest rates and (b.) some of these types of funds not performing as advertised from a risk perspective.

The problem is highlighted in an FT article, the link for which is below:

http://www.ft.com/cms/s/2/b2e7ae66-c284-11df-956e-00144feab49a.html

Re Gatser: £500 per annum sounds an awful lot, have you looked at the SIPP Centre? £35 + VAT per quarter, please an additional £30 + VAT per quarter if you take out off panel investments. I know many people that have a SIPP with the SIPP Centre and are very happy with it.

I hope this helps.

The Cautious Investor

Gatser

Cautious_Investor wrote: »

Hi

Re Gatser: £500 per annum sounds an awful lot, have you looked at the SIPP Centre? £35 + VAT per quarter, please an additional £30 + VAT per quarter if you take out off panel investments. I know many people that have a SIPP with the SIPP Centre and are very happy with it.

I hope this helps.

The Cautious Investor

Thanks... but... SIPPCENTRE charge the £140pa for each "off panel" Cash Deposit (plus £35 initial charge).

To reduce risk I prefer to have 3 or 4 different deposits so the £500 HORNBUCKLE MITCHELL is a cheaper option.

Always pleased to hear of better ways to operate my SIPP though!
Thanks again...:)

Cautious_Investor_3

Gatser wrote: »

Thanks... but... SIPPCENTRE charge the £140pa for each "off panel" Cash Deposit (plus £35 initial charge).

Having checked their website it seems they charge £120 pa + VAT for up to 5 off panel investments, not each off panel investment, from their website:

If you carry out an Off Panel transaction (3)£30 + VATAdditional quarterly administration (4)£30 + VAT (up to 5 assets)
£140 pa for each would be very expensive!