best SIPP in year 2020

bowlhead99

mcooke999 said:

Username999 said:

mcooke999 said:

You'll only be able to invest in Vanguard funds but that's enough for 99.9% of people.

Who says that?

I do lol. What else would anyone need to invest in that Vanguard don't provide?

Nobody needs to invest in a specific fund. 
So, it's about what someone might want to invest in that Vanguard don't provide. Perhaps you lack imagination 

Thrugelmir

mcooke999 said:

Username999 said:

mcooke999 said:

You'll only be able to invest in Vanguard funds but that's enough for 99.9% of people.

Who says that?

I do lol. What else would anyone need to invest in that Vanguard don't provide?

A whole variety of different options.  

SonOf

mcooke999 said:

Username999 said:

mcooke999 said:

You'll only be able to invest in Vanguard funds but that's enough for 99.9% of people.

Who says that?

I do lol. What else would anyone need to invest in that Vanguard don't provide?

whole of market fund selection as Vanguard doesnt cover all areas.
Whilst I like Vanguard for some things, they are not the answer for everything. In our portfolio, we have 2 HSBC, 2 ishares and a Fidelity tracker along with 3 vanguard.    If I limited myself to Vanguard only then I would not have the coverage I would be looking for and would be paying higher charges.

Prism

mcooke999 said:

Username999 said:

mcooke999 said:

You'll only be able to invest in Vanguard funds but that's enough for 99.9% of people.

Who says that?

I do lol. What else would anyone need to invest in that Vanguard don't provide?

Here are a few that Vanguard do not seem to offer
Global government bonds, UK small cap funds, private equity, intermediate term bond funds etc
To be fair I haven't selected a single Vanguard fund in my portfolio as I prefer other options.

happypie

Malthusian said:

happypie said:

hi guys,
i am planning to start SIPP with 500 pounds a month.
i already have workplace pension with 'the people pension' provider and i have opted for '100% share' investment in that. the fund i have chosen in that has .50% charge and the people pension has 0.50% charge so overall it's 1% annual.

Are you sure? Auto-enrolment schemes have a 0.75% charge cap, so I'm wondering if you're counting the same 0.5% charge twice.

If you pay more into the employer scheme will the employer increase their matching contributions?

Does the employer offer salary sacrifice, so you get National Insurance relief as well as income tax relief?

i have utilized employer's max contribution so they won't increase theirs.
I don't think they offer salary sacrifice, also i am not very sure about that option.
regarding charge, pls check this -
each fund has AMC of 0.5%
https://thepeoplespension.co.uk/investments/shariah-fund-factsheet/
the people pension charge is 0.5%
https://thepeoplespension.co.uk/costs-and-charges/

 

happypie

SonOf said:

happypie said:

hi guys,
i am planning to start SIPP with 500 pounds a month.
i already have workplace pension with 'the people pension' provider and i have opted for '100% share' investment in that. the fund i have chosen in that has .50% charge and the people pension has 0.50% charge so overall it's 1% annual.

You are mistaken.  The peoples pension has a 0.5% p.a. charge.    There is not an additional 0.5% charge on top.  
Plus, the closest fund in your workplace pension in risk to VLS60 has beaten it after charges.  Plus VLS60 on the Vanguard personal pension (when it comes) will have an additional 0.15% charge to deduct from it.   I havent checked what VLS80 or 100 compare like.  

pls check my earlier post. i think both charges are separate but i may be wrong.

the people pension have 65%, 80 % and 100% equity option but i have chosen https://thepeoplespension.co.uk/investments/shariah-fund-factsheet/ fund as i liked its top holdings.

happypie

mcooke999 said:

Based on your original post, providing you're happy with the volatility of equities and plan on investing for the long term (10Yr+ at least) then you can't go wrong with the Vanguard Lifestrategy100 or 80 funds (100% equity & 80% equity respectivley)... The fee is 0.22% so the total fee would be 0.37% including the platform fee.

0.37% total fee seems good for both funds you mentioned, compare to nutmeg, AJ Bell and HL. thanks.

happypie

Lomcevak said:

mcooke999 said:

I would wait a few months until Vanguard deliver their own SIPP.  Their fee is going to be 0.15% which beats most other platforms.

Careful - although the percentage fee is low, the fee cap only kicks in at £250,000 (which at 0.15% is a fee of £375 per year), so under some circumstances it can be much cheaper to hold Vanguard products elsewhere. For example, I hold almost £250k of Vanguard funds in a Fidelity SIPP at a cost of £45 per year, almost £330 a year less than Vanguard's announced fee for the same holding.

(Vanguard looks slightly cheaper on trading fees, but not nearly enough to close the gap unless you're continually trading many times a month)

Looking at this https://www.fidelity.co.uk/services/sipp/fees-and-charges/#tab-link the fee seems to be 0.35% (for 7500 to 250000 which is where i and most people would be). how its cheaper than 0.15% of Vangaurd?

Lomcevak

happypie said:

Looking at this https://www.fidelity.co.uk/services/sipp/fees-and-charges/#tab-link the fee seems to be 0.35% (for 7500 to 250000 which is where i and most people would be). how its cheaper than 0.15% of Vangaurd?

Fidelity is 0.35% for funds, stepping down to 0.2% once you reach £250k, but an ETF portfolio is capped at £45 per year. My account is all-ETF, so that's all I pay. So it's much cheaper than Vanguard would be for me, as Vanguard don't cap platform fees for ETFs.

Vanguard could be good for the OP, but the important point is that it's not just percentage fee that matters, and although the OP is just starting out (which makes percentage-based attractive), the cutover to capped or fixed-fee being preferable can happen quite quickly. Trading fees need consideration too (trading fees generally matter less than platform fees once the amounts start to grow, but if you're frequently buying they can become quite significant).

bowlhead99

happypie said:

Malthusian said:

happypie said:

hi guys,
i am planning to start SIPP with 500 pounds a month.
i already have workplace pension with 'the people pension' provider and i have opted for '100% share' investment in that. the fund i have chosen in that has .50% charge and the people pension has 0.50% charge so overall it's 1% annual.

Are you sure? Auto-enrolment schemes have a 0.75% charge cap, so I'm wondering if you're counting the same 0.5% charge twice.

If you pay more into the employer scheme will the employer increase their matching contributions?

Does the employer offer salary sacrifice, so you get National Insurance relief as well as income tax relief?

i have utilized employer's max contribution so they won't increase theirs.
I don't think they offer salary sacrifice, also i am not very sure about that option.
regarding charge, pls check this -
each fund has AMC of 0.5%
https://thepeoplespension.co.uk/investments/shariah-fund-factsheet/
the people pension charge is 0.5%
https://thepeoplespension.co.uk/costs-and-charges/

On that https://thepeoplespension.co.uk/costs-and-charges/ page, they mention the annual management charge (AMC) is 0.5%, deducted from the fund you are invested in.  (We charge 0.5% of the value of your pension pot each year to cover the cost of investing and administrating your pension savings.  This is known as an ‘annual management charge’ (AMC). The AMC is deducted automatically through a reduction in the unit price of the fund that you’re invested in.) That's it. As Malthusian said, the total charge is not going to be 1% because auto-enrolment pensions are not allowed to be that costly. The charge is 0.5%.

If you go and look at any of the individual funds (e.g. the Shariah one you use) its factsheet will say its AMC/OCF is 0.5%, which is entirely consistent with them saying on the main fees page that they charge 0.5% of the value, known as an AMC, taken from the fund you're invested in. The fee on the individual fund factsheet is the fee that you will pay, and is the same whichever of the factsheets you're looking at.

But they don't charge 0.5% of the value, known as an AMC, taken from the fund you're invested in, and then charge another 0.5% of the value, also known as an AMC, taken from the fund you're invested in. The 0.5% is all-in.  The ongoing charges figure of the fund is the same as the AMC of the fund, and there isn't another general platform fee or administration charge on top.

happypie said:

Lomcevak said:

mcooke999 said:

I would wait a few months until Vanguard deliver their own SIPP.  Their fee is going to be 0.15% which beats most other platforms.

Careful - although the percentage fee is low, the fee cap only kicks in at £250,000 (which at 0.15% is a fee of £375 per year), so under some circumstances it can be much cheaper to hold Vanguard products elsewhere. For example, I hold almost £250k of Vanguard funds in a Fidelity SIPP at a cost of £45 per year, almost £330 a year less than Vanguard's announced fee for the same holding.

(Vanguard looks slightly cheaper on trading fees, but not nearly enough to close the gap unless you're continually trading many times a month)

Looking at this https://www.fidelity.co.uk/services/sipp/fees-and-charges/#tab-link the fee seems to be 0.35% (for 7500 to 250000 which is where i and most people would be). how its cheaper than 0.15% of Vangaurd?

Although Fidelity don't crow about it on their SIPP page, if you go to the main fees and charges page which is linked from the page you were looking at (visit our main fees and charges page)  the service fee tab of that linked page explains:

• The portion of the fee you pay on exchange-traded investments (shares, exchange-traded funds (ETFs), bonds, etc.) is capped at £45.

So if instead of using open ended funds at Fidelity you restricted yourself to using things that were traded on a stock exchange (such as Vanguard ETFs) you would only be paying a maximum of £45 of annual service fees.

So if you had £12,000 it would be £12,000 x 0.35% = 42 and more expensive than Vanguard's £12,000 x 0.15% = £18, but if you had £200,000 it would be capped at the maximum £45 rather than Vanguard's £200,000 x 0.15 = £300) . You would also pay a dealing fee of £1.50 for each investment purchase transaction on a regular dealing plan or £10 for ad-hoc purchases or sales (which Vanguard don't have.

It is the same concept as the other thread you started yesterday about HL capping their SIPP fees at £200 if you only used exchange-traded instruments bought on a stock exchange rather than open ended funds on their funds platform

Limiting yourself to ETFs to keep platform fees down is a more complex route - because using Vanguard's range of ETFs as an example, they generally track only a single index rather than mixing different types of assets in one product, so you would have to build up your whole portfolio out of individual specialist building blocks, unless you only wanted one asset class, which most people don't. Also a new investor may find ETFs more complex than 'funds' as they have a real-time price on the stock market rather than simply one daily agreed price; and some provider's ETFs can have more complex features such as gearing; and ETF shares don't qualify for any FSCS coverage - though you might take the view that FSCS coverage is not likely to ever get used because it won't cover general investment losses, only unusual situations like fraud.