Cheapest Sipp: build yourself a low cost DIY pension article

harryhound

I do find the alphabet soup so frustrating, it means having to read masses of bumph to understand what is being said.
I can manage SIPP (Self Invested Private Pension)
F/S scheme ?
PR (Protected Rights ????)

Why do people have to abreviate stuff that is already written in jargon?

EdInvestor

Yes F/S is final salary and PR protected rights, one gets fed up having to repeat them all the time.I appreciate it may irritate people who only post occasionally but the answer is addressed to a poster who is quite well informed about pensions.

averageguy11

happyharry i am interested to know what accout offshore yur pension cash is in...6.9% is a nice rate..i want one!

lamanga2004

Hi, I'm 38 in a couple of weeks. Only have aroud £30k in my Money Purchase Pension Scheme at work.

I was thinking about moving it to a SIPP.

Any advice for a complete novice to SIPPs?

Would my employer (a very well-known global IT firm) continue making contributions? (I know, I know, I should ask them...)

(I am less of a novice investor, hence my desire to manage my own pension.)

dunstonh

Any advice for a complete novice to SIPPs?

SIPPs are an experienced investor product. Designed for people who want to utilise direct investments rather than investment funds (typically).

The charges on SIPPs are typically higher than stakeholder and personal pensions. However, an experienced investor would accept that to get the investment options they want (you shouldnt compromise your portfolio to save a tiny bit on charges). That said, an inexperienced investor can do far more damage with a SIPP and end up paying more in charges and having a worse investment portfolio.

Would my employer (a very well-known global IT firm) continue making contributions? (I know, I know, I should ask them...)

Unlikely with larger firms as the admin should all staff want to do it would be massive. You can ask though.

purch

I was thinking about moving it to a SIPP.

Any advice for a complete novice to SIPPs?

Wait until you are not a complete novice

GTG

lamanga2004 wrote: »

Hi, I'm 38 in a couple of weeks. Only have aroud £30k in my Money Purchase Pension Scheme at work.

I was thinking about moving it to a SIPP.

Any advice for a complete novice to SIPPs?

Would my employer (a very well-known global IT firm) continue making contributions? (I know, I know, I should ask them...)

(I am less of a novice investor, hence my desire to manage my own pension.)

Alliance Trust Savings have very cost effective SIPP. There is no annual admin. charge, there is a flat rate dealing commission of £12.50 per trade. Dividends can be automatically re-invested when they accumulate to £150 for a fee of I think it's £5 now. So very cost effective.

Included in their investment choices are all stocks quoted on the LSE, Gilts, ETF's, OEIC's and Unit Trusts. If you are considering the last two then it may be more cost effective to look at Hargreaves Lansdowne as they refund 100% of initial costs on most funds and also refund a small proportion of the annual management charges. They do however have their own annual admin charge. If you are averse to investing in individual stocks as an alternative to funds you may be able to find a suitable investment trust which will give you a "funds like" exposure to your desired investment theme. http://www.itsonline.co.uk/

Investment trusts are typically companies set up in business to buy shares in other companies and are traded like any other company on a stock exchange. Therefore there are no intial and on going annual charges other then the management costs which are taken from their P&L account. An added bonus is that some of these can trade at a discount to NAV. I am personally a great fan of IT's and I was dissapointed not to have found them earlier. As financial advisers do not get paid commission on recommending IT's they are unlikely too unless you are hiring them on a fee paying basis. Here is a link to Alliance Trusts literature page.http://www.alliancetrust.co.uk/adss_58pyr5dse22/fullsipp_downloads.htm

Good luck.

dunstonh

OEIC's and Unit Trusts. If you are considering the last two then it may be more cost effective to look at Hargreaves Lansdowne as they refund 100% of initial costs on most funds and also refund a small proportion of the annual management charges.

They do not make any refund on the annual management charges. Which is why they are not as cheap as many people seem to think they are.

EdInvestor

dunstonh wrote: »

They do not make any refund on the annual management charges. Which is why they are not as cheap as many people seem to think they are.

Not on SIPPs, agreed, they do on ISAs and direct investments.No annual fee though - fund charges only.

purch

If you are considering the last two then it may be more cost effective to look at Hargreaves Lansdowne as they refund 100% of initial costs on most funds and also refund a small proportion of the annual management charges. They do however have their own annual admin charge

HL have no Annual Administration Charge if you invest solely in OEIC or Unit Trust Funds that pay them a trail commission. They do not refund the AMC or any part of it on Funds held in their SIPP wrapper.