Does HMRC payment go into cash part of SIPP?

AnotherJoe

Audaxer wrote: »

Thanks dunroving, I'll check with them. I looked at the HL site and it said something similar to your experience - that they would invest it based on your last funds purchase. You'd think it would be simpler just to put them to cash.

My and Mrs AJ top ups with HL always were added as cash. Maybe i have a default selected somewhere, or perhaps thats because we never immediately invested the cash, even if only by a few minutes.

NordicNoir

Asghar wrote: »

With a Hargreaves Lansdown SIPP, it's very straight forward and logical.

When you top up the SIPP with cash you are given the option straight away to invest the money into a fund, which if you do, then when the tax relief arrives, HL will invest it into the same fund. This happens even if you had sold the fund in the meantime or switched to a different one.

If after topping up with cash, you do not choose to invest it into a fund straight away, the money goes into the cash fund and so does the tax relief when it arrives. Even if you invest the money into a fund later, the tax relief is still placed into the cash fund, it's the original instruction that the tax relief follows.

100% agree with this, this is how our HL SIPP works.

dunroving

Asghar wrote: »

<<snip>>

That's a strange way of doing it.
If I wanted to invest £1000 gross into a UK Index Fund, then after investing £800 net, I have to wait for the tax relief to arrive and go into that fund before I can choose to invest into another fund, like a Global one. If I was to invest into another fund before the first tax relief arrived then they would both be invested into the second fund. That's not how it should be.

I wholeheartedly agree.

I can be a bit of a financial numpty but I am often surprised at the numpty-ish logic of some providers.