We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
We're aware that dates on the Forum are not currently showing correctly. Please bear with us while we get this fixed, and see Site feedback for updates.

50 pound a month SIPP

Hi,

I'm looking to open a SIPP and pay in 50 pounds month that I would like to immediately invest in blue chip shares. It seems as though youinvest is my best option. But is there anything else out there? And do the govt tax benefits outweigh the 1.50 monthly fee?

Comments

  • dunstonh
    dunstonh Posts: 118,612 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Is it financially worth doing that? Dealing charge on a £50pm are going to eat into it a lot. Plus, the amount involved seems an awful lot of work for little gain. A fund would make more sense.
    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.
  • Kua
    Kua Posts: 303 Forumite
    Part of the Furniture Combo Breaker
    I'm just enticed by the fact the govt boosts it by 25%, if I've understood pensions right. What do you mean by a fund exactly?
  • Kua
    Kua Posts: 303 Forumite
    Part of the Furniture Combo Breaker
    I'm just enticed by the fact the govt add 25%... What do you mean by a fund exactly?
  • dunstonh
    dunstonh Posts: 118,612 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    edited 20 December 2013 pm31 6:06PM
    Kua wrote: »
    I'm just enticed by the fact the govt boosts it by 25%, if I've understood pensions right. What do you mean by a fund exactly?

    Tax relief can be higher if you pay higher rate tax or above.

    A fund as in an investment fund. A collective investment or mutual fund is what they are often called.

    A SIPP is an experienced investor product aimed at investors with typically larger amounts wanting access to more advanced investment options. personal pensions are a middle ground and stakeholders are for people with small amounts to invest (typically under £100pm).
    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.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    It might work out cheaper to put the £50 p.m. into a Regular saver account at a bank or building society, and then when it matures, typically after a year, invest the £600 + interest into a pension: see for example J P Morgan on p52 of the link.

    You might, perhaps, prefer an S&S ISA, or even just an Investment Trust Investment Scheme. (The latter has no tax advantage but can be very cheap to run: see p44 onwards.)

    http://www.theaic.co.uk/sites/default/files/statistics/attachment/AICStats30Nov2013.pdf
    Free the dunston one next time too.
  • for £50 a month, i'd look at stakeholder pensions via cavendish online - http://www.cavendishonline.co.uk/pensions/stakeholder-pensions/

    that doesn't let you invest in individual shares, just in funds (collective investments which invest your money in a large number of different shares, or of bonds, or ...). but then investing in individual shares is impractical with such small amounts, whether or not it's in a pension.
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    I fully agree with gym sock.

    With this amount, you need to keeps fees low and spread your risk via collective investments. £50pcm is getting into personal pension territory (just) rather than stakeholder. The latter are going out of favour and offer fewer choices.

    My daughter has a stakeholder with Aviva via Cavendish and there are some good funds that spread risk well beyond the UK and well beyond just equities.
    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.
  • lawriejones1
    lawriejones1 Posts: 305 Forumite
    Part of the Furniture Combo Breaker
    edited 23 December 2013 pm31 1:10PM
    I invested £50 per month in a Sipp and currently have around £700 invested in there and, like you, add £50 a month. I invested the lot sometime this year in BP shares when they were low and recently sold them when they tipped over £4.90 per share.

    I think I made a 'modest' return, but it was good fun deciding when to sell them, and piqued my interest in pensions a little more. With such small sums of money it's just a bit of fun.
  • I should point out that I do now consider myself a stock market expert and have set up a course selling stock market advice for only £1,000 per time.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 348.4K Banking & Borrowing
  • 252.1K Reduce Debt & Boost Income
  • 452.4K Spending & Discounts
  • 241K Work, Benefits & Business
  • 617.3K Mortgages, Homes & Bills
  • 175.7K Life & Family
  • 254.2K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.