Getting started with a SIPP

hjghg5

Circumstances have combined to get me looking at SIPPs. I've just changed job, and the "default" contribution levels are lower than I want. I was considering AVCs or a SIPP and the decision was made easier when I got a letter from my previous employer's pension provider asking me to transfer out of the scheme.

I'm not a complete investment novice - I have a S&S ISA but the stakes feel higher with this one because the ISA is made up purely of "spare" money on a monthly basis rather than having a bigger lump sum made up of over a decades contributions to put into it!

The numbers are likely to be a little over £80k to transfer in and then a couple of hundred per month as monthly contributions. At that level I'm led to believe that flat fee providers are the best bet. What I haven't yet got a feel for is whether there are any recommendations (or ones to avoid) from a customer service point of view, in particularly in relation to the transfer and administration around the regular contributions.

I'd also like an idea of how complicated it is to reclaim the extra tax (I'm a higher rate taxpayer but have never filled in a tax return or really dealt with HMRC other than getting my tax code through the post because most of my money has been in ISAs until this year).

And finally, the investment itself. My ISA is in Vanguard Lifestrategy 80. I like the idea of a fund made up of a diversified bundle of trackers. My current pension is also tracker based but 100% equity and more heavily biased to the UK (60% UK, 40% non-UK). I can't get the actual fund with other providers as far as I can tell, but could probably find something similar I think. I think that I prefer the wider diversification of Lifestrategy but I'm less sure about putting all my eggs in one basket so would be grateful for suggestions of other stuff to look at!

I'm still in my 30s so plenty of time to go to retirement.

AnotherJoe

Your eggs arent really in one basket with VLS though as its a global fund. The only thing i dont think its in is property (IIRC), there are some property trackers around, i have some in a blackrock global tracker there are others of course.

You could also look at a global exUK tracker since you have a lot in your company pension thats UK you shoudl perhaps diversify away from that. If Brexit turns out to be more damaging to the UK economy that is expected that would work well.

Re who to use, I dont know how the charges would work out compared to others but from a customer service point of view i find Hargreaves Lansdown flawless including transferring in (I transferred two pensions in separated over about 5 years) and making payments, regular or ad hoc, and dealing with any queries. There are some comparison websites around to tell you whats best financially though they never give the full picture for ease of use and lack of problems.

re taxes its easy as long as you do it all through self assessment online just sign up in plenty of time as that takes (IME) about 6 weeks to get set up.

digannio

Another globally diversified offering (which also includes property) you could take a look at is the Legal and General Multi Index funds. Choose the risk level that's right for you, 0.31% charges and rebalanced for you. Choosing a fund like this or the Vanguard one means you are avoiding putting all your eggs in one basket... ie it's spread across the world and across different asset classes. They are meant to be core investments that can stand alone.

jamesd

To reclaim the extra tax for a person in PAYE is easy. Just go to your online Personal Tax Account and tell HMRC about your plans for the year. HMRC will adjust your tax code to give you the relief. Probably still time to do that in this tax year.

hjghg5

How do I get an online personal tax account?...

TheTracker

hjghg5 wrote: »

How do I get an online personal tax account?...

Gov.uk had the enlightened idea that they should think of major search engines as their "front page", that expecting users to head to a government website and navigate through pages of how government is structured is unfriendly.

So, type "personal tax account" into Google (or similar) and there it is as the first non-advertisement link.

bigfreddiel

hjghg5 wrote: »

How do I get an online personal tax account?...

Everyone has one. It's based on your NI number.

Just google for it as the first reply said and register to use it. I've adjusted my tax codes with it, a really good app.

Cheers fj

msallen

Alternatively you can just ring HMRC to tell them.

I started a SIPP 3 months ago, rang HMRC on the Monday told them my gross salary and my planned SIPP contributions. It took all of 5 minutes and they confirmed my new tax code there and then. By the Wednesday the HR department at work were contacting me to tell me they had received an update to my tax code.

bigfreddiel

msallen wrote: »

Alternatively you can just ring HMRC to tell them.

I started a SIPP 3 months ago, rang HMRC on the Monday told them my gross salary and my planned SIPP contributions. It took all of 5 minutes and they confirmed my new tax code there and then. By the Wednesday the HR department at work were contacting me to tell me they had received an update to my tax code.

When I tried to ring them I hung on for twenty minutes before giving up. What number did you use?

Cheers fj

bigadaj

bigfreddiel wrote: »

When I tried to ring them I hung on for twenty minutes before giving up. What number did you use?

Cheers fj

Ring them at 0800 in the morning, or even a bit before, and you normally get staright through.

LXdaddy

bigadaj wrote: »

Ring them at 0800 in the morning, or even a bit before, and you normally get staright through.

LOL
What's "a bit before" the morning? The night?