X-O Sipp new charges... WOW!

clivep

Having done all the resaerch, I decided to go with X-O for my SIPP for the priciple reason that they charged no fees on drawdown, contributions or transfers.

In detail:
Annual fee £95 + VAT.
Transfer in free.
Transfer out free.
Capped drawdown free + no charge for calculations at review period.
Flexible drawdown free.
No account closure fee apart from £100 if SIPP emptied within 5 years of commencing flexible drawdown.
In Specie transfer out £15 per stock.
Only real drawback was you can only invest in stocks & shares, not funds.

It took 2 months for the transfers in to go through. They would not provide log-in details to my trading account until they had the money and even then sat on it for a while before sending me a statement showing they had received it but still not giving me my log-in details. In the end I called the dealing team and got them to email me the details.

So a week ago I got back into the market by investing my £200k pot into 20 x £10k shares.

Today I received a letter from X-O with their new fees from 6th April of:
Annual membership fee £120.
Drawdown fee £100 per year.
Uncrystallised Funds Pension Lump Sum £25 per payment
SIPP closure fee £300 1st year, £200 2nd year, £100 thereafter.

What it doesn't say in the letter but shows on their website:
Transfer out £100.
In Specie transfer out £50 per stock.

All prices + VAT

They say the charges have had to go up due to the added complexity in administering the SIPP. Huh? The new drawdown options require far less work than the old income drawdown calculations.

They have not said anything in the letter about what to do if I wish to reject their new fee structure. Under the old fees it would have cost me 20 x £15 = £300 to transfer out. The new fees mean it will be £300 + £100 + (20 x £50) = £1,400.

These new fees represent a material disadvantage to me and as such should X-O have to waive all fees should I wish to transfer out?

redux

I glanced at it the other day and thought interesting, might be worth a closer look later.

I looked this morning and thought I must have misremembered which was the one I was going to look at again.

kidmugsy

clivep wrote: »

Today I received a letter from X-O with their new fees from 6th April....

Under the old fees it would have cost me 20 x £15 = £300 to transfer out. The new fees mean it will be £300 + £100 + (20 x £50) = £1,400.

These new fees represent a material disadvantage to me and as such should X-O have to waive all fees should I wish to transfer out?

Why should they? They've given you a month's notice. Why not just get on with it?

Sobraon

I got the same letter. Looks like I will be transferring to Hargreaves Lansdown.

clivep

kidmugsy wrote: »

Why should they? They've given you a month's notice. Why not just get on with it?

I know that telecoms and energy providers have to allow you to end your contract without penalty in the weeks following a price rise that is materially disadvantageous to you. I just wondered whether the same contract law applied to SIPPs.

Thrugelmir

clivep wrote: »

They say the charges have had to go up due to the added complexity in administering the SIPP. Huh? The new drawdown options require far less work than the old income drawdown calculations.

Perhaps it would have been better to wait until the post 6th April changes settle in before moving your funds. I imagine many providers will be revising their charging structures.

On a personal level I've found their customer service to be first class. Always responded to my emails in a timely fashion.

Orwell

I chose Fidelity for my SIPP because they have no charges other than the usual fund/platform charges. None - zip - zero. I've just taken a small capped drawdown pension for example - and incurred no fees to set this up.

As far as I can tell their costs are lower than H-L in most respects, but especially good for the lack of any charges for valuation, any kind of drawdown, probate, closure, transfer in, transfer out, and all the other things in small print.

I am not trying to advise anyone for or against, but I can't see any downside here, if I am wrong please tell me!

Sobraon

Whilst priced well Fidelity have a requirement to have a pot of £75k before entering drawdown.

This was the deal breaker for me as I have a company scheme and some old schemes with fixed annuity rates meaning my SIPP will probably not exceed £75K.

Just checked this £75K requirement is still in place and the Key facts document (why is it so difficult to find?) p7 says,

"In order to be able to take pension drawdown through the Fidelity SIPP where benefits haven’t been taken before, you must be able to fulfil the following criteria ........ Your pension account value must be at least £75,000"

zagfles

Orwell wrote: »

I chose Fidelity for my SIPP because they have no charges other than the usual fund/platform charges. None - zip - zero. I've just taken a small capped drawdown pension for example - and incurred no fees to set this up.

As far as I can tell their costs are lower than H-L in most respects, but especially good for the lack of any charges for valuation, any kind of drawdown, probate, closure, transfer in, transfer out, and all the other things in small print.

I am not trying to advise anyone for or against, but I can't see any downside here, if I am wrong please tell me!

No you tell us - they did used to insist on advice for drawdown but they seem to have backed down on that now - I presume you didn't take any advice?

clivep

Orwell wrote: »

I chose Fidelity for my SIPP because they have no charges other than the usual fund/platform charges. None - zip - zero. I've just taken a small capped drawdown pension for example - and incurred no fees to set this up.

As far as I can tell their costs are lower than H-L in most respects, but especially good for the lack of any charges for valuation, any kind of drawdown, probate, closure, transfer in, transfer out, and all the other things in small print.

I am not trying to advise anyone for or against, but I can't see any downside here, if I am wrong please tell me!

The downside is that their platform charge is a 0.35% per annum service charge. This is indeed less than H-L who also charge a % but much higher than a lot of the fixed fee offerings.

I transferred my L&G Stakeholder pension of £70k+ to Fidelity last year as Fidelity allowed partial transfers out free of charge. I could then move out 2 x £7k to other new schemes that were subsequently cashed in under the small pot rules a month ago when I reached 60.

The plan is that in each of the next 6 years until I get my state pension I shall pay £2,880 a year into my Fidelity SIPP and withdraw £14k+ as an UFPLS (Uncrystallised Funds Pension Lump Sum). This should be free of fees but Fidelity have yet to send me any info on how they will be handling an UFPLS and whether there's minimum pot requirement.

Orwell

Fidelity provide free "guidance" from their retirement people. There is no need for full advice before drawdown.

My SIPP happened to be £80k and I placed £50k of that into capped drawdown.

I must admit I was not aware of any min £75k requirement, and I suggest you call them to ask that since a lot of the T&Cs have been updated.

It all went very smoothly. I don't intend to take any income (just the TFLS) so that I can keep contributing to my DC plan as before.

Time is marching on though - so if you want drawdown this tax year, best to get on with it ASAP, as all the companies will be getting very busy.