SIPP Nightmare

segovia

I have been looking at SIPP providers, initially starting with a 30K deposit and a regular 750PM. This is to dip my toe in the water at DIY in readiness for the imminent transfer of my 300K PPP to a SIPP (assuming I don't resolve my differences of opinion with my IFA).

I am liking Interactive Investor as they have a fixed fixe rater than % based; however, drawdown fees are £120.00 a year. As I only intend to run the SIPP for 4 or 5 years before the drawdown is II the best solution.

I am trying to reduce my current PPP charges of 1.33% so % of the portfolio value + % fund charges does not seem like the way to go.

IanSt

Drawdown fees can add quite a bit to the annual costs of running a sipp when you are in the drawdown period,

You could perhaps use UFPLS to access your money - I think on ii that costs £50 + VAT for each UFPLS withdrawal.

It might also make sense to move across to a % fee platform when you've reduced the amount in the sipp to a point where fixed fees start being more costly for you than a percentage fee.

Albermarle

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however, drawdown fees are £120.00

probably best not to get too focused on relatively minor platform costs ( although you would not be the only one on this forum ) It represents 0.04% of your pot size , so irrelevant compared to performance of your investments .

Freecall

Albermarle wrote: »

.
It represents 0.04% of your pot size , so irrelevant compared to performance of your investments .

But surely this only gets said in the context of a purchase of a service in the financial sector.

If I said that I paid £5 for a can of beans, no one would say 'but that only represents 0.00001% of your wealth therefore it's irrelevant'.

Value is still value. £120 is still £120 to be paid out of the OP's pocket.

This site is supposed to be called MSE after all.

Albermarle

Value is still value. £120 is still £120 to be paid out of the OP's pocket

OP is not even going into drawdown for 4 years , so the importance of this £120 fee in future is very small compared to the fact the investments could easily lose £60K in a week if the market turns sour .

Dox

segovia wrote: »

I have been looking at SIPP providers, initially starting with a 30K deposit and a regular 750PM. This is to dip my toe in the water at DIY in readiness for the imminent transfer of my 300K PPP to a SIPP (assuming I don't resolve my differences of opinion with my IFA).

I am liking Interactive Investor as they have a fixed fixe rater than % based; however, drawdown fees are £120.00 a year. As I only intend to run the SIPP for 4 or 5 years before the drawdown is II the best solution.

I am trying to reduce my current PPP charges of 1.33% so % of the portfolio value + % fund charges does not seem like the way to go.

Your post is headed "SIPP Nightmare". If you are finding basic research so fearsome, as you sure you really want a DIY SIPP? Possibly another IFA might be more reassuring.

Alexland

I agree this isn't a nightmare - just some charging detail to come to terms with.

Another option would be to consider platforms that cap their fees for holding ETFs (eg Fidelity at £45 pa) however you would then need to consider that ETFs have no FSCS protection, are not available as mixed assets, the bid offer spread and trading fees to invest, sell down and rebalance.

Given the value you might want to consider spreading this money across two SIPPs.

Alex

segovia

Dox wrote: »

Your post is headed "SIPP Nightmare". If you are finding basic research so fearsome, as you sure you really want a DIY SIPP? Possibly another IFA might be more reassuring.

Unlikely another IFA, I have come to the conclusion that none are interested in a transacitional agreement, % pot only. The minimum is 0.5% of pot annually, I just can't see any tangible benefits of going down that path.

segovia

Alexland wrote: »

I agree this isn't a nightmare - just some charging detail to come to terms with.

Another option would be to consider platforms that cap their fees for holding ETFs (eg Fidelity at £45 pa) however you would then need to consider that ETFs have no FSCS protection, are not available as mixed assets, the bid offer spread and trading fees to invest, sell down and rebalance.

Given the value, you might want to consider spreading this money across two SIPPs.

Alex

I was thinking OEIC's, Gilts, maybe some shares later on. The majority would be OEIC's. Not worked out the distribution ratio yet.