SIPP and pension plans

11fernsroad

Hi
I am 50 years now,and had contributed to work place pension for 8 years.For last 5 years I have gone self employed and not had any pension schemes.
I would now work towards building up a pension pot,and I get the impression that SIPP is the best option.Problem is I dont understand them.
Is it that I join SIPP with an agency and then put in lumpsum(or can it be given on a monthly basis) which they invest in profitable ventures and build up my pension pot?
I have little investments in platforms like Saving Stream and Funding Circle-can these be incorporated into SIPP and thus avoid tax on the interests earned?
Please correct me if I am wrong.I totally out of depths here.

jamesd

You can pay in as many lump sums as you like and can make monthly payments if you like, or either.

You would pick the investments to use in a SIPP. Normally you would choose a fund of some sort. For a person with little investment experience a global tracker fund would normally be a good choice and Vanguard is one fund provider that offers a good range at reasonable prices. You don't see the explicit charge, it's deducted from the fund in little pieces each day and just shows up in the performance.

Most SIPP providers will offer the Vanguard fund range or other similar tracker fund ranges.

You can't usefully include P2P like SavingStream and Funding Circle in a pension unless you will be investing more than perhaps £100,000. This is because you will face a charge of at least £1,000 a year from the SIPP providers who offer this ability. For the provider best known for doing this you would also need to meet these requirements:

1. total pension pot value of at least £200,000, across all of your pensions.
2. significant investments in unlisted companies, including by lending to them.
or one of their other sets of possible qualifying criteria.

The purpose is to ensure that they only accept as customers people who have a good understanding of what they are getting into and who have a good deal of money, so that they don't get into trouble with the FCA for selling the product inappropriately.

If you meet those requirements have a read of SIPP, SIPP Hurray! Peer lending in your SIPP. Note that the requirements there aren't the actual current minimums, investigate more to find out if you can qualify, the blog post gives one set, not all sets.

p2pinvestor

Hi

I am on the lookout for a suitable p2p platform/loan in which I can invest pension fund (SSAS) monies i.e a loan for Commercial purposes (not residential or a residential connection). Looking for a relatively low LTV (50% or less).

Any help would be appreciated

11fernsroad

jamesd wrote: »

You can pay in as many lump sums as you like and can make monthly payments if you like, or either.

You would pick the investments to use in a SIPP. Normally you would choose a fund of some sort. For a person with little investment experience a global tracker fund would normally be a good choice and Vanguard is one fund provider that offers a good range at reasonable prices. You don't see the explicit charge, it's deducted from the fund in little pieces each day and just shows up in the performance.

Most SIPP providers will offer the Vanguard fund range or other similar tracker fund ranges.

You can't usefully include P2P like SavingStream and Funding Circle in a pension unless you will be investing more than perhaps £100,000. This is because you will face a charge of at least £1,000 a year from the SIPP providers who offer this ability. For the provider best known for doing this you would also need to meet these requirements:

1. total pension pot value of at least £200,000, across all of your pensions.
2. significant investments in unlisted companies, including by lending to them.
or one of their other sets of possible qualifying criteria.

The purpose is to ensure that they only accept as customers people who have a good understanding of what they are getting into and who have a good deal of money, so that they don't get into trouble with the FCA for selling the product inappropriately.

If you meet those requirements have a read of SIPP, SIPP Hurray! Peer lending in your SIPP. Note that the requirements there aren't the actual current minimums, investigate more to find out if you can qualify, the blog post gives one set, not all sets.

Hi
While I totally understand the very nature of these investments are unpredictable,I would still like to have some kind of figure in my mindabout my pension pot.
I am 50 years old.If I were to invest 500 per month into say HL's SIPP for next 10 years,on an average how much can I hope to see in my pension pot at 60 years of age?

sandsy

They have a pension calculator on their website which will how you how much you might get back. Obviously, there's a few assumptions involved on investment returns etc but it still gives you a general idea.

westv

jamesd wrote: »

1. total pension pot value of at least £200,000, across all of your pensions.

In "normal" life £200,000 is a huge amount but, in the world of pensions, it doesn't seem to be that big.

greenglide

£500 per month is £6,000 per year so after 10 years you will have paid in £60,000.

Add to this tax relief of 25% and you get £75,000 paid in.

Of course there is investment growth. You can assume that investments at least keep with inflation (and they should do better) so assume £75,000 in today's costs.

Is that enough?

AnotherJoe

xxxxxx wrote: »

Drop me an email to xxxxxx could be of assistance here.

Cheers

Spam above reported

jamesd

westv wrote: »

In "normal" life £200,000 is a huge amount but, in the world of pensions, it doesn't seem to be that big.

Well, it is around five times the current average pension pot size so even there it's pretty bug. Where it's not so big is in the world of those planning for good defined contribution pension income levels, when it corresponds to around £8,000 a year if the 4% rule is used. So lots of people who are in the DC camp are going to have to end up well above that if they use pensions extensively.

xylophone

it's pretty bug.

One of these?:D

https://featuredcreature.com/5-beautiful-bugs-planet/

Quite brightened my day......

LHW99

If you like / want p2p, you could put something in a p2p ISA, alongside the SIPP.
You don't get tax relief on the way in, unlike the SIPP, but there is no tax in the ISA, or when you take it out.