Another FSAVC to SIPP Question

zagfles

dunstonh wrote: »

Its like having a monster truck to do the school run. Pointless.

A SIPP isn't a "monster truck". It's more like a "lego truck", it can be as simple or complicated as you want, you build it into whatever you want

You could leave it all in cash - how much simpler can you get than that (not that I'm saying that would be a good idea).

dunstonh

SIPPs have larger menus of charges. Far more scope to mess up and are typically more expensive. They are also more complicated.

If someone wants all those balls and whistles then fair enough. However, the vast majority do not. Many that think they want it get bored of it quickly and they just end up sitting in a contract that is unsuitable for them.

zagfles

dunstonh wrote: »

SIPPs have larger menus of charges.

Well, yes, there are more options and so more possible things to charge for. Majority of which most people won't pay.

Far more scope to mess up and are typically more expensive. They are also more complicated.

Like I said they're as complicated as you choose to make them.

If someone wants all those balls and whistles then fair enough. However, the vast majority do not. Many that think they want it get bored of it quickly and they just end up sitting in a contract that is unsuitable for them.

Just because it's got loads of bells and whistles doesn't mean you have to use them. You could just use one bell. Or one whistle.

BTW is there a comparison table/spreadsheet for personal/stakeholder pensions like Snowman's? Couldn't find one. I think the issue with a lot of personal pensions is that they either insist you use an intermediary or they charge quite a lot if you don't. Charges direct seem to be around 0.8-1%, which is quite expensive. Certainly more than a SIPP invested in trackers.

You can get them cheaper via the likes of Cavendish or perhaps even an IFA, but if you want simplicity then do you really want to bother going via an intermediary to buy your pension?

Perhaps you do

Rheumatoid

The fund it is in seems to have a 1% annual mgt charge and a 1% total ongoing charge. I am sure i can get cheaper in a SIPP. They don't look complicated to me. I can also easily set it up myself without having to go through someone who will take money off me anyway as Zagfles has mentioned.

dunstonh

Rheumatoid wrote: »

The fund it is in seems to have a 1% annual mgt charge and a 1% total ongoing charge. I am sure i can get cheaper in a SIPP. They don't look complicated to me. I can also easily set it up myself without having to go through someone who will take money off me anyway as Zagfles has mentioned.

For comparison, you can get a personal pension at 0.4%p.a. bottom line

zagfles

dunstonh wrote: »

For comparison, you can get a personal pension at 0.4%p.a. bottom line

Bottom line, so without having to go through an intermediary? Or is the intermediary cost included in the 0.4%?

dunstonh

zagfles wrote: »

Bottom line, so without having to go through an intermediary? Or is the intermediary cost included in the 0.4%?

I believe Cavendish offer pensions with that level of charge.

zagfles

dunstonh wrote: »

I believe Cavendish offer pensions with that level of charge.

So via an intermediary then - the cheapest one I can see on the Cavendish site for a £21k transfer is 0.45% plus their £35 setup fee http://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/aviva1/

Not bad, but pretty similar to a SIPP invested in trackers. HL and Fidelity do trackers around the 0.1% mark, some as low at 0.06%, so the difference is marginal when you add the platform fees (Fidelity 0.35%, HL 0.45%). And no intermediary/setup fee.

In fact according to Snowman's spreadsheet, Best Invest have an even lower platform charge of 0.3%.

Rheumatoid

zagfles wrote: »

So via an intermediary then - the cheapest one I can see on the Cavendish site for a £21k transfer is 0.45% plus their £35 setup fee http://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/aviva1/

"Only available through Financial Advisers or other brokers where a fee would be added to the pension."
R.

AlanP_2

zagfles wrote: »

I don't think you get it. When people say "you don't need a SIPP" they aren't saying that the likes of HL's SIPP isn't a SIPP. They are suggesting using personal/stakeholder pensions, which in some cases can be marginally cheaper if you use the pension provider's in house funds.

However many/most personal pension providers won't deal direct with the public, they insist on you using an intermediary, either a broker or a financial adviser. This obviously has additional costs.

I guess I don't and TBH I still don't after what you have said here.

Are you saying that if somebody just wants to invest in their own choice of funds then they do or do not need a SIPP?

Just that I have a pension with Cavendish where I choose the investments and nowhere does it mention SIPP whereas the same thing purchase via HL would be called a SIPP.