Have I got this right r/e HL SIPP pension

A_T

HL also have reduced charges on many leading funds e.g. CF Woodford Equity Income is reduced by 0.15%, CF Lindsell Train UK Equity 0.20%

EdSwippet

justme111 wrote: »

... Saving £7 a year is hardly much to write home about and to justify your outrage ...

Well, to be fair, calling it £7/year understates the cumulative saving. The extra cost of Hargreaves Lansdown over Close Brothers or Cavendish would be 0.2%/year per contribution, plus growth. You can use this calculator to estimate the total effects.

Assuming 6% growth and 0.5% underlying fund charge, if the OP puts £3600 (gross) into a SIPP each year for three years and then withdraws the lot he saves £35 in charges overall. If his wife does the same but for nine years she saves £383. Total is £418 saved.

Hardly life-changing amounts, but still, why not pick the cheaper option? It would fund a nice weekend away for two in a decent B&B or hotel (or perhaps up to a week in an indecent one!). It is unlikely that any of the bells-and-whistles offered by Hargreaves Lansdown will be of any use to the OP.

xylophone

Do you think you are doing anyone a favour by suggesting they'd be OK at HL for the next 30 years,

Was the poster suggesting this for himself or his wife?

In the poster's case, using the maximum contribution for his circumstances, he could, for example, open the SIPP, (no charge) hold the contribution in cash (no charge), wait for the tax relief to be added (no charge), take the 25% tax free lump sum (no charge), take the balance (no charge provided that he is careful not to close the SIPP within the year).

He could continue in a similar way while HL's fee structure remains the same.

With regard to the spouse, although having earned income would permit her to contribute more, she too wishes to contribute only the £2880 and access the pension after nine years - this is still a very modest SIPP and I would be happy to consider HL for this on the basis of ease of administration and efficiency.

Neither I not anybody else was suggesting that HL is the cheapest provider, only that they are efficient and have an excellent web site that is easy for a novice to use. See post 6.

I have a fully retired relative who uses HL for his SIPP and finds them very satisfactory for this purpose.

I moved my ISA from HL because the II charging structure makes it much cheaper for me to hold it with II.

It is a case of horses for courses and it is up to the OP to do his research and decide accordingly.

AnotherJoe

EdSwippet wrote: »

Well, to be fair, calling it £7/year understates the cumulative saving. The extra cost of Hargreaves Lansdown over Close Brothers or Cavendish would be 0.2%/year per contribution, plus growth. You can use this calculator to estimate the total effects.

Assuming 6% growth and 0.5% underlying fund charge, if the OP puts £3600 (gross) into a SIPP each year for three years and then withdraws the lot he saves £35 in charges overall.

Huge assumption because due to short timescale and low amounts of income, I'd advise him to stay in cash. In which case, he would save money compared to, AFAIK, any of the schemes you mention.

EdSwippet

AnotherJoe wrote: »

Huge assumption because due to short timescale and low amounts of income, I'd advise him to stay in cash. In which case, he would save money compared to, AFAIK, any of the schemes you mention.

Indeed, for the OP. For his wife, not so much. Nine years (or more) is a decent enough period in which to hold some lower-risk investments, and a rather extended period over which to give up bank or building society interest.

My main objection was to the statement than HL costs just £7/year more than the alternatives. The difference is much greater when more than one year's contributions are involved, and easily amounts to several hundred pounds over the period.

justme111

EdSwippet wrote: »

Indeed, for the OP. For his wife, not so much. Nine years (or more) is a decent enough period in which to hold some lower-risk investments, and a rather extended period over which to give up bank or building society interest.

My main objection was to the statement than HL costs just £7/year more than the alternatives. The difference is much greater when more than one year's contributions are involved, and easily amounts to several hundred pounds over the period.

OP wants to contribute this year to a pension to be entitled to some benefit. He would draw it in 3 years. What investments is his pension in and whether it is cash or not is not that relevant now and likely not going to be very relevant ever. He found a platform he feels ok about , he is a novice in it and not planning to amass fortune. Splitting hairs is likely to be counterproductive

AnotherJoe

EdSwippet wrote: »

Indeed, for the OP. For his wife, not so much. Nine years (or more) is a decent enough period in which to hold some lower-risk investments, and a rather extended period over which to give up bank or building society interest.

My main objection was to the statement than HL costs just £7/year more than the alternatives. The difference is much greater when more than one year's contributions are involved, and easily amounts to several hundred pounds over the period.

That again would depend what the investments were.

Alexland

If it's so urgent you don't have time to think then a Nutmeg SIPP is a good choice for a small regular investment. The charges are fair and the ETFs within their fixed portfolios are pretty mainstream. Most importantly there are no transaction or exit fees.