HL for Cash SIPP

caveman38

Can you tell me if I've missed anything.
Very few SIPP providers offer a bank deposit account option paying interest of any note when opening a simple SIPP. I have found a couple and the fees would negate the interest although I'd be happy with that.
I have looked into the HL SIPP where they would only give you 0.2% on cash deposits but make no charges for setting up and running the SIPP, obviously getting a few bob for the cash for themselves with the cash they can invest.
This solution is OK by me as the SIPP is only to run for 4 years and accumulate £30,000 and drawdown say 25% and £3,000 for 7 years after assuming things don't change.
Would there be charges that I may have missed and although one of the largest and apparently award winners. Do forum members rate them highly.

kidmugsy

I rate them highly. When you phone you promptly get a human who will deal intelligently and intelligibly with your questions or requests. Their admin is good. They do flood us with literature in the post but that does no harm. Recommended.

zagfles

Agreed - the admin and customer service are very good. They make things very easy for DIY investors. They have a reputation for being expensive but for low value SIPPs they are one of the cheapest.

But check the interest rate - for cash you won't get 0.2% unless you have over £100k. http://www.hl.co.uk/pensions/sipp/charges-and-interest-rates
They sometimes have fixed rate offers eg a higher rate for a fixed period but don't seem to have any at the moment.

[Deleted User]

zagfles wrote: »

Agreed - the admin and customer service are very good. They make things very easy for DIY investors. They have a reputation for being expensive but for low value SIPPs they are one of the cheapest.

But check the interest rate - for cash you won't get 0.2% unless you have over £100k. http://www.hl.co.uk/pensions/sipp/charges-and-interest-rates
They sometimes have fixed rate offers eg a higher rate for a fixed period but don't seem to have any at the moment.

Yeah HL's fee this month was £1.48 for the wife's SIPP, usually covered by some form of cashback like Quidco etc

I like the fact that the fees are visible whereas regular private pensions of old like to hide this info... In fact I think my 'modern' Aviva plan's fees are not visible, probably hidden away somewhere... Of course I could work out but that's not the point.

Shedman

It might also be worth you looking at the X-O SIPP (which is run in conjunction with Liberty) if you are only wanting to keep it all in cash. Their fees are higher than HL (as HL are basically free for cash SIPPS and charge no drawdown fees) - £120+VAT annual admin fee and £100+VAT annual drawdown fee (once into drawdown) as far as I can see from mine. However, Liberty will hold the cash in a Metro account paying 1% interest and will allow you take the 25% cash free lump sum without having to transfer the rest of the money through to the X-O dealing account (which pays nil for cash) if you don't want to buy any shares, bonds or ETFs. At your proposed £30k level the cost differential between XO and HL will be marginal but for larger sums it can be beneficial especially if you (like me) don't want to entertain the risk factor of investing due to planning to draw it all down out over 3 or 4 years to bridge the gap to DB pension kicking in etc

donkingkong

@Shedman - This is very useful, thank you. You may be able to get 1.25% if you're able to hold NS&I products in the X-O SIPP? http://www.nsandi.com/income-bonds

Either way 1% on the cash is going to be great. Is there anywhere else that offers a better rate on cash?

SteveG787

The interest rates you are looking at are those for the working accounts of the SIPP but there is no reason you can't use the SIPP to invest in a deposit account at another bank, as long as the account at that bank is allowed in a SIPP and the SIPP provider allows it. This opens up the field to banks with fixed term deposit accounts that pay over 2%, not great but fully FSCS backed and ideal for the short term where stock market fluctuations don't have time to work through.