SIPP or ISA Funds ?

wooder

dunstonh wrote: »

ISAs and pensions can have the same funds, the charges and get the same performance. The only differences are tax and maturity process.



If you use a pension in the IFA market then that may be a case if you want a high risk income option. If you use a DIY provider then it is not the case (although the FCA is carrying out a review into the DIY market later this year and one of the concerns is the ability to transact high risk transactions without sufficient safeguards and whether some DIY providers are crossing the advice line with their offerings).

It should also be noted that IFA providers are often cheaper than DIY. DIY still allows commission to be paid. So, a non-commission option with a fee can be cheaper than a commission option. This is especially noticeable on annuities but can apply to other products as well.

I'm still not clear on this :-

If you have money in an Isa, then you just simply take it out as and when you need it, no charges, no fees, if you have £1000 in .... you get £1000 out...

If you have money in a pension then do you not usually (always ?) have to pay the pension provider a fee to set up a plan to take your money out, be it lump sum, drawdown, flexi drawdown or whatever ? So if you have £1000 in.... you don't get £1000 out ?

dunstonh

If you have money in an Isa, then you just simply take it out as and when you need it, no charges, no fees, if you have £1000 in .... you get £1000 out...

with most, yes.

If you have money in a pension then do you not usually (always ?) have to pay the pension provider a fee to set up a plan to take your money out, be it lump sum, drawdown, flexi drawdown or whatever ?

no you dont.

So if you have £1000 in.... you don't get £1000 out ?

To compare with ISA, you would have to include the tax relief. So, £1000 in the ISA ignoring growth is £1000. Whereas £1000 in pension cost you £800 (assuming basic rate relief. £600 if higher rate)

You can get £1000 out but only 25% of it will be tax free. The other 75% is subject to tax assuming you have used up all your age allowance.

jamesd

wooder wrote: »

I'm still not clear on this :-

If you have money in an Isa, then you just simply take it out as and when you need it, no charges, no fees, if you have £1000 in .... you get £1000 out...

If you have money in a pension then do you not usually (always ?) have to pay the pension provider a fee to set up a plan to take your money out, be it lump sum, drawdown, flexi drawdown or whatever ? So if you have £1000 in.... you don't get £1000 out ?

This just depends on the ISA and pension providers. Some have various charges, some have other different charges. If you want one general rule it's that ISAs are likely to be a little cheaper than pensions but not enough to be the deciding factor in which to use.

sandsy

wooder wrote: »

I'm still not clear on this :-

If you have money in an Isa, then you just simply take it out as and when you need it, no charges, no fees, if you have £1000 in .... you get £1000 out...

If you have money in a pension then do you not usually (always ?) have to pay the pension provider a fee to set up a plan to take your money out, be it lump sum, drawdown, flexi drawdown or whatever ? So if you have £1000 in.... you don't get £1000 out ?

I suspect that will change as providers get to grips more with the new pension flexibilities as (within the age limits) pensions will have to look as flexible as ISAs to be considered attractive.

tali

xylophone wrote: »

Not frozen - it will revalue in deferment.

http://www.lgps.org.uk/lge/core/page.do?pageId=101760

You are not earning? You can still invest up to £2880 into a pension and receive tax relief of £720, bringing your contribution up to £3600.
A stakeholder might suit.
http://www.cavendishonline.co.uk/pensions/stakeholder-pensions/

You might also consider a stocks and shares ISA as you have already built a cash rainy day fund.

Are you using the best current account(s) for your circumstances?

Thxs .The stakeholder seems a good option - is it better than HL SIPP ?

dunstonh

tali wrote: »

Thxs .The stakeholder seems a good option - is it better than HL SIPP ?

SIPPs are experienced investor options. They offer investments that are not found on more basic pensions. They can be quite damaging in the wrong hands.

Stakeholders are a very very basic option. Relatively cheap in most cases but some expensive ones still exist.

Personal pensions are a middle ground. Often the cheapest option.