SIPP - Who To Go With and What to Invest In?

atush

Wrong, we said can be cheaper- mainly depends on what you invest in

dunstonh

It is always stated that PPs are cheaper than SIPPs

Not on this site. "can be" is the key wording. Not "will be".

I have recently set up a SIPP for my daughter - it is invested in VLS 100% - the costs are 0.25% platform charge, 0.29% fund charge/anum and a one off 0.1% initial charge for the VLS fund. This equates to just over 0.54% /anum and I cant see any other charges - are PP's that much cheaper and will this still be the case when the new pension rules come in?

That is comparable to a personal pension except a PPP will get cheaper as the value gets larger. I suspect this is a small value pension though.

There are no price pressures to increase charges on personal pensions. However, there are price pressures to increase charges on SIPPs though.

pip895

atush wrote: »

Wrong, we said can be cheaper- mainly depends on what you invest in

? I wasn't only going on what has been said in this thread - I have seen it mentioned reasonably frequently that PP's are cheaper than SIPP's- and by people I trust to know what there talking about.:)
I just wondered what sort of overall rates were available if you want to invest in something like VLS 100%.


(cross posted - thanks for explanation dunstonh)

pip895

dunstonh wrote: »

There are no price pressures to increase charges on personal pensions. However, there are price pressures to increase charges on SIPPs though.

Out of interest what are the price pressures on SIPPs that aren't there on PPs? I can understand there would be costs involved if you put some of the esoteric things in like property – but presumably that would be charged separately. I cant see why holding VLS 100% in a SIPP would cost any more to administer than outside of one, or in an ISA or in a PP. Going forward isn’t there a good chance that all the different pension vehicles will be merged together? – what is the difference anyway, apart from the PP being more restricted in what you can put into it?

dunstonh

Out of interest what are the price pressures on SIPPs that aren't there on PPs?

Recent FOS decisions on investments held in SIPPs where the FOS believes the SIPP provider should carry out due diligence. If the trend continues then the SIPP providers will have to pay to carry out work they do not currently do. The FCA seem to be following the FOS in this as they recently said"During our review, we found that a significant number of Sipp operators are still failing to manage these risks and ensure consumers are protected appropriately, despite our recent guidance. In our view, the failings we identified put UK consumers’ pension savings at considerable risk, particularly from scams and pension fraud."

Capital adequacy changes will hit SIPP providers harder than insurers. Not so much the big ones but he smaller ones.

Going forward isn’t there a good chance that all the different pension vehicles will be merged together?

You would think so but it hasnt happened. I put it mainly down to regulatory risk. The FOS and FCA do not like SIPPs for the average consumer.

what is the difference anyway, apart from the PP being more restricted in what you can put into it?

It is usually restricted because they carry out due diligence. You will likely see more of this in future as it was a bit lax in the past but is currently the hot potato.

atush

pip895 wrote: »

? I wasn't only going on what has been said in this thread - I have seen it mentioned reasonably frequently that PP's are cheaper than SIPP's- and by people I trust to know what there talking about.:)
I just wondered what sort of overall rates were available if you want to invest in something like VLS 100%.


(cross posted - thanks for explanation dunstonh)

That is the sort of research someone who wanted to invest in that (one fund) for a pension would do. And that means it could be a sipp or a PP.

Not being the sort who would put 100% into any one fund (as nice as Vanguard funds ARE, it hasn't come up for me. But wil have on the numerous Vanguard threads?

zagfles

pip895 wrote: »

It is always stated that PPs are cheaper than SIPPs

I have recently set up a SIPP for my daughter - it is invested in VLS 100% - the costs are 0.25% platform charge, 0.29% fund charge/anum and a one off 0.1% initial charge for the VLS fund. This equates to just over 0.54% /anum and I cant see any other charges - are PP's that much cheaper and will this still be the case when the new pension rules come in?

SIPPs can be even cheaper - can get trackers around 0.1% OCF, platform charges can be as low as 0.2%.

For personal pensions Cavendish are worth a look:

http://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/