Does a SIPP pension really save you that much, if at all, after eventual TAX and charges.

jimlad68

AnotherJoe wrote: »

Yes thanks for those thoughts, and as I said previously it is most likely more beneficial to use a SIPP over other investments

BUT
- it is not as good as it first appears e.g. "the government give you 20% etc, but they then take a lot of it back from you later".
- much more hasle; forms forms and time.
- despite what you say, from my investigations, the lowest charging ISA was much less than the lowest charging SIPP when considering drawdown. In my case comparing iWeb ISA to FIDELITY SIPP (.35% but no fees) but other providers with lower % had lots of charges in drawdown.

Perhaps 1 provider when "saving" and another when in drawdown?

Please advise me if you think there is a cheaper SIPP than Fidelity when in drawdown.

Paul_Herring

You appear to be looking for absolute confirmation of your own views (which appear to lean towards 'why bother with a pension at all, it's all too much <heavy sigh> bother, and isn't worth it/too expensive,') and persistently argue, or ignore, anything that appears to contradict them.

Is there much point in carrying on with this?

Aretnap

jimlad68 wrote: »

it is not as good as it first appears e.g. "the government give you 20% etc, but they then take a lot of it back from you later".

Nobody is disputing that. However, saying that the tax advantages may be smaller than they first appear does not mean that there are no tax advantages, so it's a bit of a red herring. The correct comparison is against other investment wrappers which actually exist, not against a hypothetical wrapper which you would like to exist but which doesn't.

Actually if you are eligible, one wrapper which does exist and is worth considering is a Lifetime ISA. That pays the equivalent of basic rate tax relief on the way in, with no tax to pay on the way out, so if you pay basic rate tax now and expect to pay basic rate tax in retirement then the tax advantages are potentially greater than a pension. The disadvantages are a limited choice of providers, a fairly low ceiling on what you can pay in, and the fact that you can be required to withdraw it early (with a penalty) if you get into debt or need means tested benefits, unlike a pension which is locked away entirely and cannot be touched by your creditors or the DSS.

- much more hasle; forms forms and time.

I've opened a SIPP online. I seem to remember doing it in my lunch break and still having time to eat lunch. What are the forms forms and forms of which you speak?

AnotherJoe

jimlad68 wrote: »

Yes thanks for those thoughts, and as I said previously it is most likely more beneficial to use a SIPP over other investments

BUT
- it is not as good as it first appears e.g. "the government give you 20% etc, but they then take a lot of it back from you later"
You are repeating yourself. the fact its "not as good" doesn't mean its bad ! To put a number to it, if you had a half million in a SIPP thats £32,000 you'd be better off as an absolute minimum.

- much more hasle; forms forms and time.
Its not "much" more.

- despite what you say, from my investigations, the lowest charging ISA was much less than the lowest charging SIPP when considering drawdown. In my case comparing iWeb ISA to FIDELITY SIPP (.35% but no fees) but other providers with lower % had lots of charges in drawdown.

Perhaps 1 provider when "saving" and another when in drawdown?

Please advise me if you think there is a cheaper SIPP than Fidelity when in drawdown.

Exactly. As I said, no need for any drawdown costs. I am with HL, they don't charge for drawdown.
You appear to be in the classic mode of letting the tax tail wag the dog. Sure, lower fees on an ISA but lower fees on less actual money you can spend!

To make use the 6.25% lowest possible return even with drawdown fees, let's say you had £100k in a SIPP and took it out and paid £25 for each of 12 drawdowns . So that's £300. Or £99,700 you get. Or in the ISA you'd get £93,750.
You have to look at the whole number. Your, dare I say it, obsession, with fees is blinding you to the bigger picture.
And yes there are a few more forms, but generally these are one offs. It's not "much" more hassle. Opening a pension and an ISA are similar in form filling. Going into withdrawal is half an hour of a form, once.

p.s. I echo Cloud Dogs sentiment. If after all this you would still like to forgo free money from the government (aka taxpayer) to the tune of probably many thousands of pounds, please, be my guest, when i am a taxpayer again in a few years time, I'll thank you for it and raise a glass (part paid for by you) to you in my local.

cloud_dog

jimlad68 wrote: »

- despite what you say, from my investigations, the lowest charging ISA was much less than the lowest charging SIPP when considering drawdown. In my case comparing iWeb ISA to FIDELITY SIPP (.35% but no fees) but other providers with lower % had lots of charges in drawdown.

The OH's SIPP is with Fidelity, and they pay £45pa platform charge. The SIPP isn't huge but the percentage cost is considerably less than the figures you quote.

Full disclosure...the investments are in non-OIEC investments and we do incur other costs which need to be taken in to consideration, i.e. dealing costs.

As a tax payer I am more than happy for you to forgo the valuable benefit from the Government.

jimlad68

Dear Contributors, many thanks for those "informative and spirited" responses.

I think we are mostly agreed that in MOST circumstances money in a SIPP is very tax efficient, even after later tax and charges and admin.

I think we are now just going around in circles. There is lots of detail for anyone perusing the topic to go out and research, in particular charges.