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Starting pension for first time - SIPP or Stakeholder?
james.crowley
Posts: 6 Forumite
Hi folks,
I'm looking at starting a pension for the first time (I'm 26), but have been building up a cash/share ISA pot for a little while. I'm going to just sneak over into higher rate tax this year and have worked out that if I were to transfer £2000 of my income this year into a pension then I'd save around £600 in tax.
I know it's a bit late in the day, but was thinking of opening a pension (for instance the Hargreaves Landsdown SIPP), transferring money in, and figuring out what I'm doing with some proper financial advice afterwards.
Is that a terrible idea?
What are people's thoughts on a SIPP vs Stakeholder pension, bearing in mind the following:
Many thanks!
James
I'm looking at starting a pension for the first time (I'm 26), but have been building up a cash/share ISA pot for a little while. I'm going to just sneak over into higher rate tax this year and have worked out that if I were to transfer £2000 of my income this year into a pension then I'd save around £600 in tax.
I know it's a bit late in the day, but was thinking of opening a pension (for instance the Hargreaves Landsdown SIPP), transferring money in, and figuring out what I'm doing with some proper financial advice afterwards.
Is that a terrible idea?
What are people's thoughts on a SIPP vs Stakeholder pension, bearing in mind the following:
- I run my own business
- I have exposure to shares/funds through my ISA, so I guess if I went the SIPP route I'd want to make sure my risk was spread appropriately
- It's likely to smaller monthly amounts and occasional lump sums
- I will probably go and get some proper financial advice, but after the new tax year as started...
Many thanks!
James
0
Comments
-
Is that a terrible idea?
No, it's probably quite a good idea.'In nature, there are neither rewards nor punishments - there are Consequences.'0 -
If you're accustomed to managing your own investments within an ISA, then it is exactly the same within a SIPP. The investments are identical; the difference is the wrapper. The nice bit is the tax relief, the not-so-nice bit is the restriction on getting your money back out.
HL are more expensive for SIPPs than ISAs because they do not rebate any "loyalty bonus" to the SIPP. I have tried to mitigate this by buying HSBC UK and US trackers (no loyalty bonus in any case) within the SIPP, and managed funds such as Perpetual Income within the ISA.
Stakeholders are reported to be cheaper than SIPPs
David0 -
It is not a choice between SIPP or Stakeholder. It's a choice between SIPP, Stakeholder, or Personal Pension. Some say the latter is better.
If you plan to invest (as most people do) in 'funds', then i can see no reason whatsoever to use a slightly more expensive SIPP.0
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