SIPP Protection

Chisser

My wife has 2 SIPPs (HL £65,000 (FTSE250) and Fidelity £86,000 (VLS80)). I understand these are protected up to £50K, (soon to be £80K), should a SIPP provider go bust. Are we wise to start another SIPP, (albeit with less economies of scale with regards to charges), rather than go over the £80K protection limit on one of the existing funds?
Thank you.

dunstonh

Keep it with one SIPP but dont exceed £85k per fund house if you are really that bothered.

If you are really really concerned about it then stick with personal pensions or stakeholder pensions and use insured funds or an insured pension contract (I have doubts on the latter but there are providers that make the claim that as theirs is insured at contract level, that qualifies for 100% FSCS protection).

Linton

- If a SIPP provider goes bust you are protected anyway because the assets are not owned by the SIPP provider and cannot be used to pay the provider's debts. This is different to the banks who do own the money you deposit with them. The theoretical risk is fraud by the SIPP provider, but if you go for a mainstream regulated provider the chances of that are pretty remote.


- If a SIPP provider went bust the SIPPs would probably be transferred or sold on to another provider.



- £50K or £80K is a fairly small SIPP, many people have £n00K in a single SIPP.


- If a SIPP provider goes bust the geatest risk is that access to the SIPP may be delayed whilst the SIPP is transferred to another provider.


- having 2 relatively small SIPPs with different providers would seem to cause more hassle than justified by the benefits.


- If you each were to have SIPPs then it might be prudent to use 2 different providers. This would protect against problems such as IT failures.