Safe Sipp

[Deleted User]

Hi. I have a SIPP, which i may need access to in a couple of years time.

Since from reading, it would appear the market is 'potentially' coming to the end of a 'bull run', what would be the safest possible fund, or other SIPP instrument to put my money into please?
Could it be just held in cash for instance?

Brynsam

Safe in what sense - preservation of capital (in which case cash is likely to be more appropriate than more volatile instruments)?

[Deleted User]

Yes, so that its all still there when i need it

HappyHarry

Will you need to access all of it in a couple of years' time, or will some of it remain invested for the rest of your lifetime as you gradually draw down on it?

dunstonh

SIPPs carry no risk. The risk is in the investments you utilise within the SIPP.

Since from reading, it would appear the market is 'potentially' coming to the end of a 'bull run', what would be the safest possible fund, or other SIPP instrument to put my money into please?

What risks are you trying to avoid?

Trying to time the markets is usually futile and ends up with lower returns over the long term compared to just investing through the volatility.

You have mentioned nothing about your investments currently. So, we have no context of your starting point.
We dont know what material you are reading. So, cant tell if it is one of the BS articles that calls a crash every year.
We dont know your objectives. So, cant tell if you are investing for 1 year or 10 or whatever.
You havent said what sort of access you are going to need in a couple of years.

You really havent given us anything to go on at all.

Could it be just held in cash for instance?

If you want to increase the risks of getting less back in retirement then yes. Whether it is suitable or not is difficult to say on such limited information.

So, give us more info.

Prism

In general work out how much of it you need in a couple of years time and move that bit into a safer investment.

Bravepants

It really depends on how you intend to use it. My plan is to access mine in 5 years time and draw down 5 years' worth of my tax allowance (currently £11800 plus 25% tax free), giving £15800 or so a year. I have it all held in cash at the moment, but I have just started adding £250 a month to HSBC Global Strategy Balanced to top it up to the correct amount I will need to cover the 5 years.



If you are going to use it for say 3 to 4% drawdown each year for upto 30 years of retirement then it makes sense to take some risk with it (for an appropriate chance of growth), perhaps a 60%/40% split of equities and bonds. 60/40 is about the average risk level for a UK investor.


In the latter case of investing in some fund, you might want to consider keeping a couple of year's worth of cash in there in case of a downturn in equity values, so you can draw from the cash reserve rather than sell funds.

[Deleted User]

HH, I have no idea what my future holds, i may, or may not need it.

Therefore knowledge that a specific amount of money will be available should i need it, is my objective.

If i could put it into a (tax free) bank account, i would.

To me, the stock market is just another gamble, one i'm not particularly keen to participate in.

All i was looking for, were the names of some decent cash-type funds, as again from reading, bonds appear to be over-valued.

Thanks

Bravepants

There are two types of SIPP, a "simple or DIY" SIPP...these you can apply for yourself from the likes of Hargreaves Lansdown etc. Then there are the "Full" SIPPs, which generally require intervention by an Independent Financial Advisor, and the annual fees are more expensive.



The FUll SIPP allows things like property and other esoteric investments to be held within it. They also give access to interest bearing cash accounts, for example provided by Close Brothers. But once again it depends on how much money you are talking about and whether the fees would be worth it considering the interest returned on your cash amount.

[Deleted User]

Thanks Bravepants, i wasn't aware of that. I don't think the amount of money in my SIPP would warrant the extra costs you're talking about.

dunstonh

There are two types of SIPP, a "simple or DIY" SIPP...these you can apply for yourself from the likes of Hargreaves Lansdown etc. Then there are the "Full" SIPPs, which generally require intervention by an Independent Financial Advisor, and the annual fees are more expensive.

HL is a full SIPP and is actually one of the most expensive. It doesn't have the adviser costs being a DIY SIPP but it's around double the costs of a SIPP that an IFA could use. Albeit with adviser costs added on.

Most SIPPs nowadays have moved to full SIPP basis or are moving that way (i.e. anything quoted on the LSE and other major markets and virtually all UT/OEICs). The only exception tends to be whether they support property purchase or not. Fund supermarket style SIPPs are in decline. As are personal pensions and stakeholder pensions. Long term, it looks like workplace schemes and SIPPs will be the two most common types.