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Tip for those with Hargreaves Lansdown ISAa and SIPPs
gadgetmind
Posts: 11,130 Forumite
HL charge £2 pcm per tracker you hold, and 0.5% pa for any equities or ETFs, so the fees can add up.
By default, these are taken from the account in which the fee is incurred, which means that management fees are coming from your ISA and SIPP. To make best use of your ISA and SIPP allowances, you can ask HL to instead takes these fees from cash in your Fund and Share account.
I can't see any way to do this via their web interface, but they will do it if you send them a message. They will also remind you that if there isn't enough cash in your F&S, then they'll take it from your ISA/SIPP instead.
Note that those who hold funds might well be generating enough loyalty bonus to cover fees, and this can be moved into your F&S account online. Failing that, you just need to use your debit card to top up the F&S every now and then.
By default, these are taken from the account in which the fee is incurred, which means that management fees are coming from your ISA and SIPP. To make best use of your ISA and SIPP allowances, you can ask HL to instead takes these fees from cash in your Fund and Share account.
I can't see any way to do this via their web interface, but they will do it if you send them a message. They will also remind you that if there isn't enough cash in your F&S, then they'll take it from your ISA/SIPP instead.
Note that those who hold funds might well be generating enough loyalty bonus to cover fees, and this can be moved into your F&S account online. Failing that, you just need to use your debit card to top up the F&S every now and then.
I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
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To make best use of your ISA and SIPP allowances, you can ask HL to instead takes these fees from cash in your Fund and Share account.
Many platforms have the ability to take the charges for an ISA from the general investment account (unwrapped cash holding). However, I havent seen it on pensions before. Possibly as there could be issues with HMRC with regards to rebates being treated as contributions and possibly as it is usually better to pay the charges within the pension and not outside of it.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
gadgetmind wrote: »By default, these are taken from the account in which the fee is incurred, which means that management fees are coming from your ISA and SIPP. To make best use of your ISA and SIPP allowances, you can ask HL to instead takes these fees from cash in your Fund and Share account.
I must be missing something again.
ISA I agree with, (and good to know!), but generally I'd prefer to take the charge out of the SIPP, assuming I was under the £50k/year limit, wouldn't I?
Money "inside" a SIPP is worth less than money "outside" of it, due to the tax relief. So if I move £20 from my trading account into my SIPP, there's enough there to cover the £24/year platform charge?0 -
Possibly as there could be issues with HMRC with regards to rebates being treated as contributions
HL pay their "loyalty bonus" outside of the SIPP/ISA and I guess it's for this very reason.it is usually better to pay the charges within the pension and not outside of it.
Usually but not always. We're limited to £3600pa for my wife so I'd prefer to get as much in there as we can.
We the fees being fairly low, it's all a bit marginal, but I'm an inveterate optimiser!I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Perelandra wrote: »ISA I agree with, (and good to know!), but generally I'd prefer to take the charge out of the SIPP, assuming I was under the £50k/year limit, wouldn't I?
We tend to max out our ISAs and SIPPs, so it's one of those "every little helps" kind of things.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Are you saying the money would come out of the FUND itself which you are invested in... or out of FREE CASH sitting in your S&S ISA account? If the latter then I plan to leave £24 in my S&S ISA account each year for this purpose.0
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guitarman001 wrote: »Are you saying the money would come out of the FUND itself which you are invested in... or out of FREE CASH sitting in your S&S ISA account? If the latter then I plan to leave £24 in my S&S ISA account each year for this purpose.
If you have an ISA with them, then I would laso set up an unwrapped funds and shares trading account, and just put £24 into that each year and arrange with HL to take their fee from that (as gadget says). Otherwise, you are losing money from the ISA which isn't ideal if you are using your whole allowance already each year.
gadget- I still don't get your wife's situation I'm afraid... surely the same net result as she is in at the moment could be funded by paying £2,904 into her SIPP each year couldn't it? (of which only £2,880 would receive tax relief). This would give the same net result, but with a bit less hassle.
On a related note,
If you have funds with a tax wrapper, and you are on a platform that rebates some or all of this to the customer, do you receive that rebate inside or outside the tax wrapper- and is it the same for ISAs and SIPPs? I've never had such a fund/platform before, so haven't seen it happen yet. 0 -
Perelandra wrote: »gadget- I still don't get your wife's situation I'm afraid... surely the same net result as she is in at the moment could be funded by paying £2,904 into her SIPP each year couldn't it? (of which only £2,880 would receive tax relief). This would give the same net result, but with a bit less hassle.
I'd have to tell HL that only £2880 of it would received tax relief, which is more hassle than sending a one-off message to tell them to take it from unwrapped funds. I must admit that I haven't yet looked at whether it makes any long term difference!
HL rebate in a single unwrapped "loyalty bonus" account. BestInvest seem to rebate into the relevant wrapped account. So, I guess it depends!If you have funds with a tax wrapper, and you are on a platform that rebates some or all of this to the customer, do you receive that rebate inside or outside the tax wrapper- and is it the same for ISAs and SIPPsI am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »HL rebate in a single unwrapped "loyalty bonus" account. BestInvest seem to rebate into the relevant wrapped account. So, I guess it depends!
Hum, interesting.
For an ISA, I can see that the BestInvest model works out better (more money in the ISA). For the SIPP though, I'd prefer the HL model, as I could then take that loyalty bonus, put it straight back into the SIPP and get tax relief again. (In my circumstances, where I still have some of the £50k annual allowance left, and haven't managed to get my tax bill down to zero!).
Similarly, the oft-referred to RDR rules changes would probably make ISAs a little more attractive than they are now under the HL model (lower AMC, but an unbundled annual charge paid from an unwrapped trading account).
I can see why dunston says there are rules around how this is handled by the platforms.0 -
Hmmm, I think I've only had BestInvest rebates into my SIPP so far. I'm assuming these don't count as pension contributions as I'm on a knife edge with those!I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
i thought HL didn't pay any loyalty bonus on SIPPs, only on ISAs. (though i don't have a SIPP with them.)
i could apply this advice to the charges on my HL ISA. there is literally 0 cash in the capital account in the ISA. currently, they seem to take the charges first from any income in the ISA (which would otherwise be reinvested), or (if there is no income) from the loyalty bonus account.0
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