Anyone in drawdown with interactive investor, how does it work?

Alexland

EdSwippet wrote: »

I crystallised my entire Interactive Investor SIPP so I don't see any complications with it. I will be crystallising a part of my Alliance Trust SIPP shortly though, so at that point I will run into it.

Now that II have bought Alliance Trust is it worth moving this SIPP elsewhere first?

Alex

EdSwippet

Alexland wrote: »

Now that II have bought Alliance Trust is it worth moving this SIPP elsewhere first?

I have pondered this, but the question is, where?

I hold OEICs, so the likes of HL and Youinvest would increase my annual charges by £thousands/year. I'm somewhat ideologically opposed to percentage-based platforms, and after Interactive Investor, the other main flat-fee platform is Halifax or one of its alter-egos such as iWeb. The latter would be a decent enough choice, but is pricey relative to Interactive Investor (and Alliance Trust Savings) for a pension in drawdown. Even Vanguard's own SIPP, should it ever materialise(!), would likely be much more costly for me than my current platforms.

Overall, I'll save several £hundreds/year from consolidating these two SIPPs at Interactive Investor. The concentration of things under one provider is a bit of a concern at the back of my mind, but these are 3/4 the size they were before crystallising, so that mitigates things a bit.

Interactive Investor do not charge for transfers out, which leaves me feeling fairly safe knowing that I could move out readily if my relationship with Interactive Investor starts to turn sour for any reason. I've been with them for several years now, including when they consumed TD Direct and changed the online platform around underneath me, and so far while I have encountered a few glitches along the way, nothing that comes close to motivating a move out. And certainly nothing that I would pay £thousands/year to avoid.

Alexland

Yes with a large amount in OEICs your only fixed price choices are II/AST and HSD/iWeb and as you say the HSD/iWeb costs for going into drawdown are not cheap. I expect II will eventually migrate AST customers onto their platform but I am unsure if they can/will support holding two SIPP accounts for the same customer? Even if they did then would you really want all/most(?) of your pension investments in one place?

Are you sure it is not worth swapping OIECs into ETFs in the AST pension and transferring to Fidelity for the £45 capped platform fee? Fidelity are offering some very generous cashback and will cover exit fees too? The loss of FSCS protection by switching to ETFs seems less of a risk than the limited FSCS protection of having it all on one platform?

Alex

EdSwippet

Alexland wrote: »

I expect II will eventually migrate AST customers onto their platform but I am unsure if they can/will support holding two SIPP accounts for the same customer? Even if they did then would you really want all/most(?) of your pension investments in one place?

I expect they'll merge my ATS SIPP into my current II one, but they haven't yet said what they'll do for folk with SIPPs in both when the takeover completes fully. As for keeping stuff all in one place, as already noted it's at the back of my mind, but II are hardly niche. There's no way at all I could split this up into sub-£85k chunks. There simply aren't enough SIPP platforms.

Alexland wrote: »

Are you sure it is not worth swapping OIECs into ETFs in the AST pension and transferring to Fidelity for the £45 capped platform fee? Fidelity are offering some very generous cashback and will cover exit fees too? The loss of FSCS protection by switching to ETFs seems less of a risk than the limited FSCS protection of having it all on one platform?

ETFs are more possible now than they were a few years ago. This is all accumulating tracker OEICs, and recently a viable new crop of accumulating ETFs has appeared on the scene. Surprisingly though, my blended fund costs would go up a bit with ETFs, since the OEICs I hold are actually slightly skimpier than the skimpiest ETFs. At least, that was the case last time I looked.

So yeah, possible. However, I'm not really a fan of switching around my holdings just to pander to some SIPP platform marketing halfwit (HL, I'm looking at you here!). And I've suspected for a while now that the silly split of high percentage charges for OEICs but not for ETFs and ITs will somehow break apart. Either through regulator action or market forces. Hasn't happened yet though.

Alexland

EdSwippet wrote: »

There's no way at all I could split this up into sub-£85k chunks.

I agree and am in a similar position but am aiming for a practical level of spread across platforms and fund managers.

EdSwippet wrote: »

recently a viable new crop of accumulating ETFs has appeared on the scene.

Yes after much pondering we recently invested in the recently launched Lyxor Core MSCI World ETF which has an OCF of 0.12% compared to more established Blackrock ETF which we also hold at 0.20%. The problem is the initial bid/ask spreads on the newer ETFs are big enough to knock out 2-3 years of fee savings.

EdSwippet wrote: »

And I've suspected for a while now that the silly split of high percentage charges for OEICs but not for ETFs and ITs will somehow break apart. Either through regulator action or market forces. Hasn't happened yet though.

I guess it suits the platforms to compete for the more advanced and price sensitive customers while still making very good margins on the OEIC customers. They often charge a bit extra in trade fees for exchange traded assets. I don't remember it even being mentioned in the recent FCA platform study report so doubt it is a priority.

Alex

Wisefool

Don't overlook the impact of fees when starting to draw benefits from your SIPP. With Interactive Investor there is a significant jump in fees when you start taking retirement benefits.

Those not in drawdown and taking just a single UFPLS per year pay the highest fees of all totalling £419.88 PA (wow!), those on drawdown monthly withdrawals only pay £60 less. They confirmed this to me as follows:

"I can confirm that all charges mentioned in our previous correspondence are indeed correct. The charges for the fee are your service plan of £9.99, plus the additional £10.00 SIPP admin fee and the additional £10.00 per month for drawdown. These are the ongoing fees, and do not include the one off UFPLS fee of £50 plus VAT."

IMHO the fact that the drawdown fee applies each year after a UFPLS withdrawal when the pension is not in drawdown is unfair and needs to be looked at by the regulator. Others such as Hargreaves Lansdown do not penalise in this way.

Notepad_Phil

Wisefool wrote: »

They confirmed this to me as follows:

"I can confirm that all charges mentioned in our previous correspondence are indeed correct. The charges for the fee are your service plan of £9.99, plus the additional £10.00 SIPP admin fee and the additional £10.00 per month for drawdown. These are the ongoing fees, and do not include the one off UFPLS fee of £50 plus VAT."

Are you 100% sure on this, might there have been a misunderstanding on their part on what your question was?

Their charges pdf (via https://www.ii.co.uk/our-charges) does mention the £10 monthly drawdown fee, but it says it is for ”for Flexi-access drawdown or capped income drawdown". The charge for the UFPLS charge is then on a completely different row and reads to me as that would be the only charge for UFPLS.

However if someone had part of the pension in drawdown and then wanted to do a UFPLS from the uncrystallised part of the pension then I can see that person would face both charges.

I've only been with them for a short while since they bought the sipps from Alliance Trust and hence my sipp too, but my reading of their material was that if you just used UFPLS then you would just have that charge - I'll need to reconsider if that is not the case.

LHW99

Notepad_Phil wrote: »

Are you 100% sure on this, might there have been a misunderstanding on their part on what your question was?

Their charges pdf (via https://www.ii.co.uk/our-charges) does mention the £10 monthly drawdown fee, but it says it is for ”for Flexi-access drawdown or capped income drawdown". The charge for the UFPLS charge is then on a completely different row and reads to me as that would be the only charge for UFPLS.

However if someone had part of the pension in drawdown and then wanted to do a UFPLS from the uncrystallised part of the pension then I can see that person would face both charges.

I've only been with them for a short while since they bought the sipps from Alliance Trust and hence my sipp too, but my reading of their material was that if you just used UFPLS then you would just have that charge - I'll need to reconsider if that is not the case.

My calculations suggested a pa cost of £360 for FAD versus £290 for UFPLS - as the OP said, be interested to hear from anyone actually in drawdown as to what they pay.

Freecall

I've been in drawdown with II for a number of years now, starting when they used Hartley SAS as their pension administrator and now with Barnett Waddingham.

I make one UFPLS withdrawal a year and for that I pay the following :

SIPP Admin fee £100
SIPP Admin VAT £20
UFPLS fee £60

Total £180

I also pay the £9.99 monthly platform fee of course but that covers my ISA and Trading accounts as well so cannot really be attributed solely to the SIPP. Also, that is applied as a trading credit.

It takes a bit under a month to actually make a withdrawal from initial application to cash in the bank (Barnett Waddingham are slightly quicker than Hartley SAS were).

This time is taken up with a somewhat ridiculous 3 stage process which provides dozens of pages of meaningless forecasts which try to show how my drawdown pot will perform in the decades ahead (of course they have no idea of my plans for future withdrawals or investment strategy so the forecasts are flawed before they start).

Having said that, no doubt some sort of process is forced on them by the regulators so I do what they want and it all works out in the end.

Overall I would rate the drawdown process with II as 'satisfactory' but with room for improvement.

Basically I am happy to stick with them because they are cheap.

I hope that helps.

coyrls

I was moved from ATS when I was already in drawdown. I pay what I expected per month: £9.99 trading plan, £10 SIPP Admin and £10 because the account is crystallised. So £360 per year (minus 12p). I make a withdrawal once a year and have yet to make one with II.