Cheapest Sipp: build yourself a low cost DIY pension article

cjv

chrisst170 wrote: »

I was thinking of opening a SIPP with Fidelity instead, unless there are other suggestions which are suitable for a small SIPP pot?

My SIPP is on the Fidelity platform via Cavendish, it can be cheaper than going direct:

https://www.cavendishonline.co.uk/pensions/

dunstonh

Fidelity via Cavendish doesnt do drawdown.
Fidelity software is old and clunky. Its not a bad price but it is lower quality than other options.

Be aware that many SIPP providers are going to be increasing their costs as the solvency requirements start to hit and the increased regulatory requirements start to take hold. There is also an ongoing court case which could potentially push some SIPP providers under if it goes against them. Those not affected directly will still have the increased costs going forward. sooner or later those costs will be passed on.

chrisst170

cjv wrote: »

My SIPP is on the Fidelity platform via Cavendish, it can be cheaper than going direct:

https://www.cavendishonline.co.uk/pensions/

Thanks, do they also offer to pay the exit fees like Fidelity appear to? I can't see any mention of it on Cavendish's website.

dunstonh wrote: »

Fidelity via Cavendish doesnt do drawdown.
Fidelity software is old and clunky. Its not a bad price but it is lower quality than other options.

Be aware that many SIPP providers are going to be increasing their costs as the solvency requirements start to hit and the increased regulatory requirements start to take hold. There is also an ongoing court case which could potentially push some SIPP providers under if it goes against them. Those not affected directly will still have the increased costs going forward. sooner or later those costs will be passed on.

Thanks, I'm only in late 30s, so the draw down limitations of Cavendish are probably less of a concern at this point (who knows if the pension freedoms will be the same in 20-30 years time!).


My wife has a SIPP with Fidelity and I find their platform broadly fit for purpose. I use iWeb for my S&SISA; their website doesn't look like its been touched since about 1995, so Fidelity is positively space age to my eyes!


Thanks

cjv

dunstonh wrote: »

Fidelity via Cavendish doesnt do drawdown.
Fidelity software is old and clunky. Its not a bad price but it is lower quality than other options.

Be aware that many SIPP providers are going to be increasing their costs as the solvency requirements start to hit and the increased regulatory requirements start to take hold. There is also an ongoing court case which could potentially push some SIPP providers under if it goes against them. Those not affected directly will still have the increased costs going forward. sooner or later those costs will be passed on.

Really not keen on the Fidelity platform. It shows my returns as 0% and if I want to simply see how much I have contributed I have to search through the transactions and add them up myself.

The transaction details are not very informative either, I have lots of little amounts for a few pence which do not state what they are for which I assume are fees.

I am keeping an eye out for the Vanguard SIPP, but would prefer to be able to also hold non Vanguard funds. I think It is time to start searching for a new platform.

Another part of me thinks just keep it cheap and cheerful while I build up to a more substantial pot.

dunstonh

I understand Vanguard are using FNZ as their software supplier. FNZ now dominate the software provision with many of the big platforms already using them or in process of moving to them.

I do like the FNZ software but it is prone to errors.

martinpike

Hi,

Hopefully, a very easy question - although as I'm asking it I've obviously failed to find the answer myself...

I've got a SIPP where the investments are held in the ex CoFunds / now Aegon platform.

I've got a sizeable 5 figure lump sat in cash, earning 0.7% interest (0.05% below BoE base), less the 0.29% platform fee, so net 0.41%.

Is there a 'fixed interest' investment where I can improve on this return? I'm happy to tie the money up for 12 months at a time.

I can see several 'fixed interest' investments on their research platform, but they all mention things like 'our aim is to achieve X%' and the like, which doesn't sound like a fixed interest rate to me.

I appreciate that these are funds, so are probably a constantly changing blend of underlying fixed interest investments - is that the reason for them not just saying 1.5%, or whatever?

Thanks for any feedback.

dunstonh

I can see several 'fixed interest' investments on their research platform, but they all mention things like 'our aim is to achieve X%' and the like, which doesn't sound like a fixed interest rate to me.

Fixed interest securities can have a fixed yield. However, they can be traded and the capital value can be higher or lower than the redemption price.

An investment fund made up of a collection of fixed interest securities will have a variable yield due to its very nature and what it invests in.

It is important to realise the difference between bonds and fixed term deposits. Even though many fixed term deposits refer to themselves as bonds nowdays.

martinpike

Thanks dunstonh.

BlueTewk

I have two Defined Contribution pensions that I'd like to start drawing down. The smaller one allows partial crystallisation, the larger one doesn't.

I had thought that I could transfer both pensions to a Drawdown product without taking the tax free cash and then get 25% tax free on each drawdown. But it seems that this is not available with some Drawdown products e.g HL.

So it seems I need to transfer the pensions to a SIPP first and then either:
a) move small amounts from the SIPP to a drawdown product taking the 25% tax free cash on the way, and then drawdown from the drawdown product
OR
b) just take money direct from the SIPP and take the 25% tax free cash with each withdrawal

What I don't understand is what purpose there would be in using a Drawdown product (i.e. option a above). Are the charges lower with option a)? or is there some other advantage in using a Drawdown product?

I'm currently not paying tax and not in receipt of state pension so I'd like to start taking withdrawals below my annual tax threshold.

Any help provided would be much appreciated. Apologies in advance if this is not the right place for posting this...

dunstonh

I had thought that I could transfer both pensions to a Drawdown product without taking the tax free cash and then get 25% tax free on each drawdown. But it seems that this is not available with some Drawdown products e.g HL.

Phased flexi-access drawdown is available on virtually every SIPP or personal pension that supports drawdown. I am sure HL support it.

What I don't understand is what purpose there would be in using a Drawdown product

I am not sure that there are many or even any drawdown plans left nowadays. Most providers have the functionality built into their accumulation product nowadays.