Why Selftrade SIPP?

leaphaze

I have a personal pension with Sun Alliance (now Resolution), which performed poorly this year so I'm looking at transfering the fund (worth about 18k) into a SIPP. I have a stock and shares ISA with Selftrade and have been investing in ETFs (iShares) and would like to do the same for this pension fund (I have other pension funds invested elsewhere so don't think its risky having an ISA and pension invested in the same areas).

My obvious first step was to look at Selftrade's SIPP, but I'm surprised at the complexity. To run a SIPP with Selftrade I need to have a SIPP trading account, but to use this I need a trustee/administrator who is responsible for all cash movements. I thought SIPPs were supposed to simplify pensions! Plus I assume this trustee/administrator will want to be paid for their services.

I then looked at Hargreaves Lansdown; seems I just fill in two forms!

My question is: why would anyone choose Selftrade? Am I missing something? True, there is no dealing fee when buying ETF's but is this enough?

EdInvestor

Do you trade much?The trustee for Selftrade is https://www.sippdeal.co.uk which offers its own SIPP with no annual fee and an inhouse broker.If you are an LTBH investor for your pension this can be a cheaper deal. But if you like to trade a lot it will probably be cheaper to use Selftrade because of the lower transaction fees.

HL is the cheapest choice if you want to invest in unit trusts but isn't usually competitive for shares/ETFs/ITs.

It might be worth checking out the SIPP at https://www.alliancetrust.co.uk , its costs can be very low depending on how you plan to invest.

leaphaze

As it happens my style for this would be LTBH (Long-Term Buy & Hold), only buying when dividends arrive and possibly redistruting every year or even less often. Thanks for your tip on sippdeal, I'll add them to the list.

So far I've only looked in depth at two options: Selftrade & HL. But I will look at others. What struck me with these two was the contrast in setting up procedures: easy and straight-forward with HL, but the extra complications (& costs?) with SelfTrade.

I guess what I wanted to know was is Selftrade the exception to the rule in the way it offers SIPPs, or is HL. Or maybe there are two camps:

• extra complications & costs on setup but savings elsewhere;
• simplicity.

What would really interest me is to hear from someone who has a Selftrade SIPP.

EdInvestor

It may be easier to approach it via Sippdeal rather than via Selftrade.The end result will be the same.

I recently helped a friend set up a Sippdeal SIPP and the setup process was quite straightforward, with all the problems (as usual) arising with the old pension provider.They don't like you taking your money out, that's for sure :mad:

if there are any problems with the transfer yuou would be better to deal direct with Sippdeal (who of course know all the pension rules) than have to go via Selftrade.

http://www.sippdealxtra.co.uk

HL are fine if you investing in unit trusts, but they charge additional fees for shares, ITs,ETFs etc and their trading platform is not rated.

dunstonh

A lot of old Sun Alliance pensions have fairly high guaranteed annuity rates. That could be why you are not getting much of a bonus.

SIPPs are more complicated. They are experienced investor products. They are also more expensive than personal pensions and stakeholders. If you are going down the funds route, then a SIPP could be ok providing you utilise a wide range of specialist funds. If you dont you will pay far more in charges than the alternatives.

EdInvestor

SIPPs are more complicated.

That's a matter of opinion.A SIPP holding a portfolio of shares is much easier to understand than a with profits pension for instance.

They are also more expensive than personal pensions and stakeholders. If you are going down the funds route, then a SIPP could be ok providing you utilise a wide range of specialist funds. If you dont you will pay far more in charges than the alternatives.

Rubbish.

Anyone who uses a low cost online SIPP as mentioned on this thread and invests in shares or ETFs on a LTBH basis should pay much lower charges than a conventional pension: you can't invest in these assets in a conventional pension, so the comparison is impossible to make anyway