Self administered pension

rallen1

Is there a way to run ones own administered pension and avoid having to place it with a pension provider?

The reason I am asking is because I wanted to hold physical assets in my pension, and the closest I have been is physical gold ETF.

However, for those who remember, during the relative "mild" crash of 2008, those who held gold futures and tried to cash out, realised that the underwriter was AIG which had also folded so they essentially held junk paper.

Seeing as the various governments keep printing cash at enormous rates I was thinking it would be prudent to actually hold a tangible asset like a house or real gold rather than paper.

Unfortunately I was told there is no SIPP provider that would allow you to hold gold or anything else physical in the pension - not in your custody anyway.

Any help and ideas appreciated.

mania112

It wouldn't be a pension if there wasn't a provider.

I'm sure there are SIPP providers who allow for gold to be held - but I haven't researched it recently.

Not sure your point when you mention the government are printing cash... especially as you can't retire on gold, it will have to be converted to.....cash!

Aegis

rallen1 wrote: »

Is there a way to run ones own administered pension and avoid having to place it with a pension provider?

The reason I am asking is because I wanted to hold physical assets in my pension, and the closest I have been is physical gold ETF.

However, for those who remember, during the relative "mild" crash of 2008, those who held gold futures and tried to cash out, realised that the underwriter was AIG which had also folded so they essentially held junk paper.

Seeing as the various governments keep printing cash at enormous rates I was thinking it would be prudent to actually hold a tangible asset like a house or real gold rather than paper.

Unfortunately I was told there is no SIPP provider that would allow you to hold gold or anything else physical in the pension - not in your custody anyway.

Any help and ideas appreciated.

There is such thing as a Small Self-Administered Scheme, which allows the members of the scheme to act as trustees and administrators. However, there are a lot of pitfalls which need to be avoided, not least is the fact that residential property and tangible moving assets are both prohibited investments within a pension that could leave you facing very severe tax consequences.

Unless you are extremely knowledgeable about pensions legislation or are willing to pay for a professional SSAS trustee to act for you, you'd likely be safer sticking with the more standard arrangements.

Annisele

I'm pretty sure some SIPP providers let you hold commercial property.

But I'd be concerned about lack of diversification if I just held physical assets; personally I'd want some shares and bonds as well as property and commodities. It sounds as though a lot of your concerns are about risk; there's no point squashing one risk and leaving yourself horribly exposed to others.

xylophone

https://www.pensionsadvisoryservice.org.uk/different-types-of-uk-registered-pension-schemes-and-related-benefits/workplace-pension-schemes/small-self-administered-pension-schemes
http://www.jchim.co.uk/PDFs/A%20Guide%20to%20SSASs.pdf
Some information here.

mania112

Annisele wrote: »

I'm pretty sure some SIPP providers let you hold commercial property.

That's pretty much why SIPPs were invented.

rallen1

mania112 wrote: »

Not sure your point when you mention the government are printing cash... especially as you can't retire on gold, it will have to be converted to.....cash!

Yes, but partially and slowly. If you held the today's equivalent of say 1000 pounds of gold, you would not sell it all in one go, but rather you would sell chunks over 10 or 20 years, as you needed. As the government continues to print money during those 10 or 20 years, every chunk you sell would bring you in more cash, to account for inflation and much much more. This is the idea behind holding gold.

rallen1

I am worried about an economic crash, more severe than 2008.

In 2008 AIG folded and those holding gold futures got stuffed. Northern Rock prior to that. In Greece they have arbitrarily reduced pensions by 50% or more, and there is more to come. In Cyprus they have arbitrarily confiscated deposits. In Greece they have applied huge taxes on properties, and this means that investing in properties might leave you facing huge tax bills. In France they have recently passed a law that prohibits sending coins and precious metals by post. In the US in the 1930s they passed a law that prohibited US citizens from owning gold.

If there was an economic meltdown, I would not trust that my insurance company would be around to pay me my pension. Even if the insurance company was safe, they could easily tax me at 80% (UK 1960s), or they could easily tax my house(s) (Greece 2010), or they could arbitrarily confiscate part of my annuity (Greece 2010), or by simply printing money produce a huge inflation that would make my pension not able to buy me a loaf of bread, or a combination of the above.

So there are two issues at hand. One is we cannot trust the pension providers, and secondly we cannot trust the government.

I am not an expert and that is why I am seeking opinions, but we can only trust ourselves, and probably physical commodities which cannot be accounted / controlled by the government and not confiscated or taxed. What comes to mind is precious metals, precious stones...

[Deleted User]

If you hold significant amounts of gold then you are at risk of theft. If you are at risk of theft you will need insurance. Insurance requires that you declare the things that you want to be insured.

If the government wants to tax you, whether your things are physical or not really doesn't matter. The government can throw you in prison if you refuse to hand over your gold. There are people paid cash in hand at the moment that end up in prison for not paying taxes.

If you do not trust the government, pension providers and economy then you shouldn't be trying to invest or save money, you should be leaving the country.

atush

then maybe you should not be investing at all if you are so afraid?

However, for those who remember, during the relative "mild" crash of 2008, those who held gold futures and tried to cash out, realised that the underwriter was AIG which had also folded so they essentially held junk paper.

I held stocks and shares during the last crash, and apart from a bank they have all pretty much recovered? In thee last year, they are showing stonking profits?

I also held gold but sold part of it some time ago. And I didn't have problems with AIG either. If you had bought Gold last year in your pension, you'd be down a crash-able amt? Even in a physical ETF?

you sound exactly the sort of individual who would hide money under a mattress and buy canned goods in advance of the millenium.

Not sure a normal pension/investing kind of thing is right for you?

grey_gym_sock

on the specific point about how you can hold gold within a pension, i'm unsure why a physical ETF wouldn't do. (i can see why you'd want to avoid the counter-party risk of gold futures.)

you can hold commercial property directly in a SIPP if you have enough money in there to make it practical. if not, you can hold various forms of collective investments in property, with (similarly to physical gold ETFs) no counter-party risk - only a remote of risk of an outrageous fraud, in the event of which the FSCS should cover the first £50k of losses.

more broadly, a small % of a portfolio in gold may be defensible, but (if you have a 10+ year horizon) most of it should be in typically higher-return assets such as shares or property (both of which have inherent inflation-protection, at least on a long enough view). smaller amounts of lower-return assets (e.g. gold, cash, bonds, commodities) can add diversity.