Transfer Standard Life pension to SIPP

sk99

I would appreciate advice on the issues I should consider when transferring a defined contribution fund into a SIPP.

I have around 500K in a Standard Life Group Flexible Retirement Plan divided between 10 funds and I make around 5 fund changes per year. I receive a rebate of 0.7% on the fund AMC charges.

I am considering transferring to an Interactive Investor SIPP in order to gain access to a wider range of funds and to reduce the charges.

On the whole it seems that the Interactive Investor fund charges are lower but it is difficult to make an accurate comparison because Standard Life offers its own versions of 3rd party funds (eg the Vanguard US Equity Pension Fun is offered directly by II but SL offers its own variant so they can't be easily compared in terms of performance or charges).

I would be grateful if anybody could provide any insight into this and whether there are any other points I should consider before transferring

Thanks very much

Sam

shinytop

I'm currenly in the process of transferring a sum a bit less than yours to II. II fund charges are just the standard ones but if you pick low cost ones, the flat fee makes it overall good value. A SIPP would cost you £240/year without drawdown and with limited trades, plus fund charges. In terms of service and website/app I find II OK.

SonOf

I have around 500K in a Standard Life Group Flexible Retirement Plan divided between 10 funds and I make around 5 fund changes per year. I receive a rebate of 0.7% on the fund AMC charges.

That means you have a total pension cost of 0.3% p.a. when using internal funds. That is cheap.

I am considering transferring to an Interactive Investor SIPP in order to gain access to a wider range of funds and to reduce the charges.

How do you intend to lower charges below 0.3% all in?

shinytop

SonOf wrote: »

That means you have a total pension cost of 0.3% p.a. when using internal funds. That is cheap.



How do you intend to lower charges below 0.3% all in?

Having looked around the SIPP providers for myself, 0.3% all in is very cheap. My II SIPP will work out at around 0.2%. But that's using low cost funds; it could easily be more. If I could leave it where it is for 0.3% with a similar service I wouldn't bother transferring. But I currently have a very limited choice of funds, about 0.5% charges and no ability to do drawdown.

IanSt

Don't forget to consider the costs of drawdown. The ii platform (as with many other platforms) has additional costs when you start to take money out, so that could swing your decision depending on when you thought that you'd need access to it.

Albermarle

Also the SL pension is 100% covered for compensation in case something goes wrong, whilst a SIPP is only £85K.
Now the risk is minimal, and many posters on here have well in excess of £85K in individual SIPPS but at £500K I think many would be looking to at least spread the risk ( even if it is very small) over two SIPPS .

Are you aware that SL can offer a SIPP with access to the whole market. It's not very competitive normally but if you could carry some of that discount across, it could be OK.
Also it would offer you drawdown facilities when the time comes, something your current SL pension probably can not.

Ciprico

I'm in the same boat ie considering "SL Stakeholder" -> "II/SIPP", but as Standard Life only offers a discount of .2% on SH (making my fees 0.8%) my decision is made somewhat easier.

I haven't made the move jump yet as it seems a big move and I didn't want to be making a hasty decision I'd regret later. (Never moved a pension before...)

I hadn't appreciated the 85k protection, but think I am happy to take that risk for only a few years on II...

I did call SL but all they could offer was more expensive more flexible pensions with higher discounts and a more expensive SIPP

(I don't like their fee structure - with higher initial costs then variable discounts)

My pension is £450,000 so by my simple maths I'm paying SL £3k6 per year, whereas on II I'd be paying fixed £120

(not including drawdown)

Will be eagerly watching this thread for any more comments...

AnotherJoe

OP, If you've got 10 funds and change 5 every year I'd say thats too much churn and you are likely chasing performance and probably worse off.

Your charges are low i'd stick with it unless you start into drawdown or desperately need more funds, but if you change a fund every what, 18 months I'd be examining that first.



123mat you say you'd only be paying ii £120 but i think you've missed the fund charges out of that. Unless its ETFs or Its and there are no charges for them? I dont know how ii SIPP charges work.

Albermarle

I hadn't appreciated the 85k protection, but think I am happy to take that risk for only a few years on II..

It is a complicated area as your money is not actually invested in II, but in funds or other investments , which them selves have some protection . Or your money is held in cash with II's bank which is also protected . So really the £85K on II is just there in case of some major fraud or staggering incompetence , which is very unlikely. What is more likely is that II will get sold/merged/buy another platform ( they are losing money as they gain market share ) or a big IT blow up is always possible. It is more for this latter possibility that some people prefer not to have all their eggs in one basket.

My pension is £450,000 so by my simple maths I'm paying SL £3k6 per year, whereas on II I'd be paying fixed £120

Basic is £120 + £120 for a SIPP ( I think ) + more if in drawdown .

An alternative is to go to a SIPP that has a % fee but that caps this for 'exchange traded investments ' ( means ETF's; Investment Trusts and company shares) However if you only want to use funds then the % charge SIPPs would work out expensive compared to II.

Ciprico

Joe

You are quite right, that became apparent when opening the II SIPP,

Monthly cost for platform £9.99 pcm
Extra SIPP charge £10 pcm
one free trade per month (more £7.99 per trade)

I'll be doing very little switching - so still a saving of £3000 + per year.

There are drawdown costs, but SL don't offer that at all on SH

There are no doubt cheaper platforms, but wife has II account, and I have always found them helpful and responsive...

Albermarle

Basic is £120 + £120 for a SIPP ( I think ) + more if in drawdown

Plus of course ( as already noted ) fund charges , which are already included in the SL charge .