What would happen if a SIPP provider went bust

sh856531

Hi all

I am looking at moving my pensions to Hargreaves Lansdown for managability reasons.

Essentially all of my pension would be invested in various well regarded funds (Invesco, Troy, First State owned funds for the most part). I would generally not hold any cash on account

It did get me wondering however - what would happen to my pension (and other investments held by H-L) if they went bust?

When H-L buy a fund for me, do I actually own the fund and therefore it is essentially irrelevant if HL went bust? Or is it the case that HL own the fund in someway?

If HL went bust in 40 years time - what would happen to both my pension and the funds I hold in an ISA? Are they 100% safe?

Thanks all

S

bobthedambuilder

You own the funds - HL (or any other SIPP provider) merely holds them for you. HL usually pay out or reinvest the dividends (if any) according to your instructions, so the only money really at risk is whatever small amount they are holding since the last payout/reinvestment. In any event HL is part of the FSA scheme and compensation would be available up to the specified limits.

See more here: http://www.hl.co.uk/investment-services/vantage-service/how-safe-is-your-investment