Help Choosing Best SIPP Pension

AdamS

Hi All

After writing the post, the key point was basically whether I will be charged an annual fee by Hargreaves if I invest in individual UK stocks, be they FTSE or AIM listed.
Does anyone know whatother investments are charged at the 0.5% rate? (corrected the rate).

I also couldnt find the rate of interest they pay on cash above in relation to the BOE rate.

Are there any other factors I should consider? Any other Sipp providers more suitable?

I have been fortunate enough this year to go into the 40% tax bracket and I want to invest those funds in a SIPP pension and transfer in my small existing pension.

My intention is to then invest in individual UK stocks and shares.

From what I have gathered so far, the Hargreaver Vantage is one of the best options
However I have an stocks and shares ISA at TD Waterhouse. They also offer a free to set up SIPP. However upn search moneysavingexpert and other internet searches I dont see anyone recommending it.
TDWATERHOUSE key charges
Free Intial Set UP
Free Pension transfer in fee.
Standard Dealing charges of £12.50 per trade
Annual fee is 0.025 twice a year, £40 minimum, £100 max.
Interest in cash: 1% below the BOE rate

Hargreaves Key Charges
Set Up free
Transfers In Free
Dealing charges vary from £9.95 to £29.95 depending on size of the trade.

Free for cash and more than 2500 funds *

0.5% for other investments, capped at £200 a year


Sure its Hargreaves assuming the investments are not the ones charged at 0.05%
Thanks in advance.

A

dunstonh

Does anyone know whatother investments are charged at the 0.05% rate?

HL is 0.5% not 0.05%.

Given your requirements you are probably better off using an unbundled platform provider and not a bundled one. HL is bundled so it has a focus on funds which is where it makes its money (for example it doesnt rebate trail commission which makes it the same cost as using a servicing IFA - if you are not getting IFA services then why pay for them?). An unbundled platform will rebate that trail commission when it is payable.

From what I have gathered so far, the Hargreaver Vantage is one of the best options

Its a good option but when you realise what HL are being paid then it isnt really a value-for-money option.

However upn search moneysavingexpert and other internet searches I dont see anyone recommending it.

HL have been the masters of marketing. They have done well on the internet and have gone heavy in with the newspapers on their "low cost option" to give this belief that they are cheap. The fact that most personal pensions can end up cheaper has been overlooked. HL offer a loss leader fund to highlight their "low cost". However, the vast majority do not invest 100% in that loss leader. So, it serves the purpose of loss leader very well. Indeed, we have seen on a number of occasions people think they have the cheap option but have said they invest in the expensive and generally basic quality HL MM funds which are more than twice the cost of a comparable stakeholder fund or as many as 5 times more expensive than a personal pension equivalent.

AdamS

Thankyou dunstonh for the informative reply.

What do you think of the TD Waterhouse Sipp if I want unbundle.
I presume by unbundle you mean individual stocks?

Im pretty new to pension and investments, although i do know a little about investing in individual stocks.

Thanks
A

purch

The TD Waterhouse SIPP now use A.J. Bell as scheme administrator, which should be a plus point. As an online broker TD Waterhouse will take some beating.

The Sipp used to be administered by Capita, who apparantly were not very good.

kidmugsy

We've been pretty happy with HL for our SIPPs and Alliance Trust for an ISA.

AdamS

Im starting to find it a bit confusing.

I was under the impression I could purchase shares in UK FTSE stocks in any SIPP Pension. Is this the case? Is this the case with the Hargreaves Lansdown SIPP. If I can buy individual stocks, will they be suject to the annual fee?

If I can buy individual stocks then surely the Hargreaves is teh best option.

I think Im a bit confused by the bundle and unbundle reference.

Also what does this mean: "An unbundled platform will rebate that trail commission when it is payable."


Thanks!

dunstonh

I think Im a bit confused by the bundle and unbundle reference.

bundled platforms tend to be nearly 100% focused on investment funds that pay commission. They get their funding from the fund houses. HL is a bundled platform as they are paid by fund houses to market funds. They rely on the commission paid to make a profit. An unbundled platform does not rely on commission. You pay fees and can use multiple asset types (shares, ETFs, funds etc). Price does not include commission as that is rebated off the fund charge.

Also what does this mean: "An unbundled platform will rebate that trail commission when it is payable."

HL do not rebate the trail commission of 0.5% p.a. An unbundled platform will rebate it (usually by showing the TER minus the trail commission).

If you are going to go fully (or mostly) with funds then a bundled platform can be cheaper. If you want to use wider assets then an unbundled platform may be better. A secondary issue to be aware of is that bundled platforms could be banned in June/July this year (to apply from 2012). If that happens, then bundled platforms will have to move to unbundled status and charging. Its too close to call on what the outcome is going to be. There are also inbetween options being considered as well. So, any choice you make now on platforms will need to be checked again later in the year for changes.

purch

If I can buy individual stocks, will they be suject to the annual fee?

Yes.

Only Funds that pay HL a commission are "free" in their SIPP.

HL are not the best of online brokers, so if buying individual securities is what you plan to do there are numerous better SIPP options.

jamesd

Yes, HL charges the 0.5% holding cost on shares in its SIPP. Also in the ISA. Not in the fund and share account.

You're looking at the wrong company for holding individual shares. Hargreaves Lansdown is competitive on ISA and fund and share account pricing for unit trusts and other collective investments. It's not competitive in share dealing or holding costs for any of its accounts. It's easy for IFAs who want to to undercut the charge on unit trusts in the SIPP and for others to do it for share holdings.

Have a look at places like TD Waterhouse, SIPPDeal and similar for your investment interests.

HL doesn't currently pay any interest on cash in it's accounts. That may change again if rates go up.

All SIPPs are allowed to let you hold shares. But not all SIPPs choose to offer that facility and they are allowed to charge what they like for it. HL's pricing happens not to be competitive for shares in their SIPP, so just use a place that is.

Most posts here are about unit trusts and similar things and HL is competitive in their ISA and fund and share account for those. For their SIPP the pricing can be beaten but they are convenient to use and that's worthwhile up to moderate values in the SIPP. But not for anyone who's into using shares and regular trading.

I have accounts for these things with HL but it's not what I'd choose to use if I was doing lots of share buying, selling or holding significant values in the SIPP.

piglet2

You might also look to Alliance Trust Savings as they have a SIPP that is truely self-select - you can hold Shares, etfs funds, and a good range of investment trusts. If youa re saving monthly to the pension - you can also make purchases for only £1.50 - so much better vlaue than others.

ffacoffipawb

jamesd wrote: »

HL doesn't currently pay any interest on cash in it's accounts. That may change again if rates go up.

They do ...

09/03/2011 09/03/2011 INTEREST Interest 0.02
09/02/2011 09/02/2011 INTEREST Interest 0.02

This was on a cash balance of £1600 which was reinvested when the £400 tax reclaim arrived in the SIPP to make a £2k investment.

So they do pay interest, just not very much ...

£50,000 + 0.25%
£7,000 - £49,999.99 0.10%
£1,000 - £6,999.99 0.05%
£0 - £999.99 0.00% (NIL here)

The rates apply to the balance within each tier, so £1600 earns 0% for £999.99 plus 0.05% on £600.01.