SIPP expectations

60BOWENS

Is there any kind of calculators to understand how much would my pension pot be if I use SIPP to start my pension scheme?
Say,I pay £300 per month ever year for 10 years into SIPP,on an average what would be a rough figure I can expect it hold by the end of 10 years?I just need a rough idea of the growth of my investment.

sandsy

Google pension calculator - there's lots around.

This one for example: https://www.hl.co.uk/pensions/interactive-calculators/pension-calculator

Note that the results are in real terms, ie. they already allow for inflation so show you what income your fund could buy in today's money.

EdGasket

It depends what you invest in and how that performs. Over the 10 years you would have paid in £36000 so if you aren't in anything that is volatile you could expect to have £36K plus a bit for investment growth/dividends. A figure for the latter of 3% pa would be about right assuming you have some equity exposure which would give a total of about £42.5K.

Calculator here:
http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php

PS. The above assumes the £300 is gross; if it is net then you gain an extra investment depending on your tax rate e.g. if your tax rate is 20% then your £300 net investment = £375 per month into the SIPP

AnotherJoe

I think you've misunderstood what a SIPP is.

The growth isn't really of the SIPP, its of the investments in the SIPP. You need to choose what investments. Thats what the SI stands for Self Invested - you choose them.

Take a couple of extremes, say ten years ago you invested £25,000 into (a) Apple shares, or (b) British Home Stores shares.

Option (a) would mean your £25,00 has grown to be worth squillions, (b) its worthless .

So before you choose to go into a SIPP, maybe there are better options for you?

bigadaj

AnotherJoe wrote: »

I think you've misunderstood what a SIPP is.

The growth isn't really of the SIPP, its of the investments in the SIPP. You need to choose what investments. Thats what the SI stands for Self Invested - you choose them.

Take a couple of extremes, say ten years ago you invested £25,000 into (a) Apple shares, or (b) British Home Stores shares.

Option (a) would mean your £25,00 has grown to be worth squillions, (b) its worthless .

So before you choose to go into a SIPP, maybe there are better options for you?

Though neither of those options would have been advisable to the vast majority of investors.

Your definition is right but it's generally now no more expensive to use a sipp than a personal pension, assuming your investment choices aren't too exotic, and funds are perfectly acceptable to be held rather than individual shares, and more advisable for the vast majority of investors.

60BOWENS

AnotherJoe wrote: »

I think you've misunderstood what a SIPP is.

The growth isn't really of the SIPP, its of the investments in the SIPP. You need to choose what investments. Thats what the SI stands for Self Invested - you choose them.

Take a couple of extremes, say ten years ago you invested £25,000 into (a) Apple shares, or (b) British Home Stores shares.

Option (a) would mean your £25,00 has grown to be worth squillions, (b) its worthless .

So before you choose to go into a SIPP, maybe there are better options for you?

Many Thanks
what are the other options to build a pension pot other than SIPP.I am self employed and 50 years of age.Plan to retire in 10 years.

AnotherJoe

Here's an old but I think still relevant discussion. https://forums.moneysavingexpert.com/discussion/3312896

The alternatives to SIPP are stakeholder and personal.
Main differences are the choice of investments and the costs. SIPPs have more choices but typically higher costs.

Find what you want to invest in first, then look at the cheapest way of holding that. No point paying for the flexibility of a SIPP that will let you hold a zillion types of investments if you just want one fund you can hold in a stakeholder at half the annual cost.

Also see (as an example of the comparison) http://www.bestinvest.co.uk/sipps/sipps-vs-stakeholders

p.s. So for the avoidance of doubt, do some research into investments for a pension, perhaps look on places like moneyvator for ideas and then ask here. In your position with those sums id pick one or two funds to invest in. Either a general fund, or a general fund plus property since general funds tend not to cover property.

And then find what "wrapper" is the best* to hold those funds in. Don't worry if drawdown isnt allowed (if thats part of your plans) because you can always transfer it to a drawdown friendly plan in ten years and things may have changed by then anyway.

* best isnt always just cheapest look also at customer service

dunstonh

what are the other options to build a pension pot other than SIPP

Stakeholder pension and personal pension.

Stakeholder pensions are largely niche nowadays as personal pensions offer better value in most cases. Its mainly very small amounts or irregular payment amounts/methods where stakeholder can come into play.
Personal pensions are the middle ground. They tend to be the cheapest option (generically) when the amounts are over £20k. Providers carry out a certain level of due diligence on funds within a personal pension and there is better FSCS protection than a SIPP (where there is little or no due diligence on the underlying assets).

Thrugelmir

AnotherJoe wrote: »

I think you've misunderstood what a SIPP is.

The growth isn't really of the SIPP, its of the investments in the SIPP. You need to choose what investments. Thats what the SI stands for Self Invested - you choose them.

Take a couple of extremes, say ten years ago you invested £25,000 into (a) Apple shares, or (b) British Home Stores shares.

Option (a) would mean your £25,00 has grown to be worth squillions, (b) its worthless .

So before you choose to go into a SIPP, maybe there are better options for you?

Option A would be down over 28% over the past year. So time frame is critical. Everyone has inbuilt hindsight.

AnotherJoe

Thrugelmir wrote: »

Option A would be down over 28% over the past year. So time frame is critical. Everyone has inbuilt hindsight.

For goodness sake, I wasn't claiming any foresight at all, just making the point that its the investments that make the difference, not the wrapper.

60BOWENS

Thanks for the info
I was looking at few stakeholder pension providers like Aviva and L&G.
They charge upto £250 per year as annual charge.
Are there any cost effective stakeholder pension providers i might have missed