Vanguard SIPP - Now open!!!

Sunnylifeover50plan

Deleted_User said:

I would do - in fact I would have a ISA, GIA and SIPP. But I am retiring abroad in the next few years and Vanguard will close all of your accounts (ISA, GIA and SIPP if in drawdown mode) if you are not UK Resident. (unlike most other providers)

Hi UK - do you know off of the top of your head which low cost SIPP's cater for UK folks residing in Europe? I believe AJ Bell do but are there many others? Ta.

redpete

Ah well, prospect of Vanguard offering a SIPP prompted me to look at the market.  I chose ii based on cost and range of available funds, opened the account a couple of weeks ago and in process of transferring in a couple of accounts (Fidelity SIPP and company AVC) with HL to come once my last salary sacrifice contribution into it is complete. 

[Deleted User]

Sunnylifeover50plan said:

Deleted_User said:

I would do - in fact I would have a ISA, GIA and SIPP. But I am retiring abroad in the next few years and Vanguard will close all of your accounts (ISA, GIA and SIPP if in drawdown mode) if you are not UK Resident. (unlike most other providers)

Hi UK - do you know off of the top of your head which low cost SIPP's cater for UK folks residing in Europe? I believe AJ Bell do but are there many others? Ta.

All of the ones that I have seen apart from Vanguard do. I have checked the T&C for HL, and the AJ Bells underneath the hood ones (Barclays, Halifax, iWeb) and II. They all say you must tell us if you cease to be a UK resident but they don't mention closing the account. Note - I am looking for drawdown cases only.

SnowMan

First sign of competitor platforms reacting to the Vanguard SIPP?

Interactive Investor have introduced an offer for those opening a new SIPP by 3rd April 2020, to waive their additional £120pa SIPP fee until April 2021. So you pay the main platform charge of £119.88pa (£9.99pm) but not the additional SIPP charge until April 2021.

Vanguard still potentially cheaper during the period to April 2021 for SIPPs below about 80K in value, but interesting development all the same.

https://www.ii.co.uk/ii-accounts/sipp#offer-terms 

mcooke999

That's interesting.

Has anyone's pension transfer money appeared in Vanguard yet I wonder?

ratechaser

SnowMan said:

Dazed_and_C0nfused said:

Looks like they accept DB transfers but only with a positive recommendation.

For DC schemes it is cash transfer only and they don't offer drawdown for the moment.

Quite surprising and a bit disappointing that they don't allow re-registration of Vanguard funds held on other platforms to Vanguard on transfer.

Seems to be a bit against the spirit of the regulations, which while they require providers to offer re-registration as an option when transferring away from a provider they don't require it on transfer to that provider. The FCA rule is here I think, and seems to apply to SIPPs  

https://www.handbook.fca.org.uk/handbook/COBS/6/1G.html?date=2018-01-13&timeline=True

If a client requests a firm (F) to transfer the title to a retail investment product which is held by F directly, or indirectly through a third party, on that client's behalf to another person (P), and F may lawfully transfer the title to that retail investment product to P, F must execute the client's request within a reasonable time and in an efficient manner.

A firm acting as a registrar should carry out a request by F for the re-registration of ownership of a retail investment product to P within a reasonable time.

I didn't realise any SIPP allowed a lift and shift of this sort. In Mrs RCs case it would be hugely beneficial as she's got a big LS80 holding with Cavendish and a load of spare pension allowance headroom, including carryover. If she could have moved that over into a vanguard SIPP over the next 2 tax years, it would have generated a very large tax windfall without having to put any 'new' cash in

do any other providers allow you to do this without the need to liquidate and reinvest?

bowlhead99

ratechaser said:

SnowMan said:

Dazed_and_C0nfused said:

Looks like they accept DB transfers but only with a positive recommendation.

For DC schemes it is cash transfer only and they don't offer drawdown for the moment.

Quite surprising and a bit disappointing that they don't allow re-registration of Vanguard funds held on other platforms to Vanguard on transfer.

Seems to be a bit against the spirit of the regulations, which while they require providers to offer re-registration as an option when transferring away from a provider they don't require it on transfer to that provider. The FCA rule is here I think, and seems to apply to SIPPs  

https://www.handbook.fca.org.uk/handbook/COBS/6/1G.html?date=2018-01-13&timeline=True

If a client requests a firm (F) to transfer the title to a retail investment product which is held by F directly, or indirectly through a third party, on that client's behalf to another person (P), and F may lawfully transfer the title to that retail investment product to P, F must execute the client's request within a reasonable time and in an efficient manner.

A firm acting as a registrar should carry out a request by F for the re-registration of ownership of a retail investment product to P within a reasonable time.

I didn't realise any SIPP allowed a lift and shift of this sort. In Mrs RCs case it would be hugely beneficial as she's got a big LS80 holding with Cavendish and a load of spare pension allowance headroom, including carryover. If she could have moved that over into a vanguard SIPP over the next 2 tax years, it would have generated a very large tax windfall without having to put any 'new' cash in

do any other providers allow you to do this without the need to liquidate and reinvest?

Not sure if by reference to some sort of 'lift and shift' you are misunderstanding what snowman  or the regulations are talking about, or I am misunderstanding what you are thinking of doing for Mrs RC.

The regulations say that a product provider should co-operate with a request for a re-registration of assets from one party to another, which is what Snowman was discussing.

Are you saying that Mrs RC has a lot of LS80 holdings with Cavendish which are already in a SIPP and wants to move them to a SIPP operated by another pensions provider? That is fine and Cavendish as the platform intermediary and Vanguard as the fund operator should co-operate as long as the receiving SIPP is happy to take on the assets. Vanguard as a receiving pension provider don't accept transfers of assets from other pensions, only transfers of cash, but plenty of other pension providers do accept asset transfers from other pensions (as popular examples, AJ Bell or Hargreaves Lansdown would both accept transfers of SIPP assets from Cavendish).  But I don't see how that process will generate a tax windfall or use her pension allowance headroom.

Are you instead saying that she has assets that are not in a SIPP and she would like to put them in a SIPP? In principle ,she could open a SIPP and that SIPP could acquire them from her, but how would her SIPP be able to pay her for the assets that it was buying from her, if she doesn't first fund it with cash so that she can get the tax relief and then the SIPP will have cash to pay to her to buy the assets from her?   It would be simpler to just sell/redeem the assets, get cash from selling/redeeming them, contribute cash to the new SIPP, and then the SIPP can use its cash pile to buy the same assets from the fund manager after Mrs RC has been out of the market for only a couple of days.

Maybe you are saying that she would like to fund a new SIPP by contributing assets with a known value  of £x in consideration for an agreed contribution of value £x to the SIPP, using up her annual pension allowance to the extent of the £x, instead of first converting her assets to cash and contributing the cash amount £x to the SIPP.  This is allowed by the regulations, but many SIPP providers (especially the cheap DIY ones) do not let you contribute assets with value £x to a pension as a new contribution against your annual allowance, because by the time the assets arrive in the pension they will probably not have the agreed value £x, and will instead have some other value - because the assets change value daily in the case of funds and several times a second in the case of stock exchange traded assets.

So, finding an affordable pension provider that accepts new in-specie pension contributions from outside a pension to fund a new pension is very difficult, as all the cheap ones are set up for high volumes of easy transactions and not smaller volumes of niche, more-complex transactions. So she can't really 'lift' LS80 assets from outside a pension and dump them into a pension. The solution to that is just to sell them and give the pension some cash to buy them again.   Whereas if she already has the LS80 fund assets inside a pension with pension provider A, there are many pension provider Bs who would be happy to take over the administration of those pension assets if she transferred them from SIPP A to SIPP B. It is just that Vanguard as a pension provider wouldn't take them because the vanguard SIPP only accepts incoming cash transfers from other pensions rather than incoming asset transfers from other pensions. 

ratechaser

bowlhead99 said:

ratechaser said:

SnowMan said:

Dazed_and_C0nfused said:

Looks like they accept DB transfers but only with a positive recommendation.

For DC schemes it is cash transfer only and they don't offer drawdown for the moment.

Quite surprising and a bit disappointing that they don't allow re-registration of Vanguard funds held on other platforms to Vanguard on transfer.

Seems to be a bit against the spirit of the regulations, which while they require providers to offer re-registration as an option when transferring away from a provider they don't require it on transfer to that provider. The FCA rule is here I think, and seems to apply to SIPPs  

https://www.handbook.fca.org.uk/handbook/COBS/6/1G.html?date=2018-01-13&timeline=True

If a client requests a firm (F) to transfer the title to a retail investment product which is held by F directly, or indirectly through a third party, on that client's behalf to another person (P), and F may lawfully transfer the title to that retail investment product to P, F must execute the client's request within a reasonable time and in an efficient manner.

A firm acting as a registrar should carry out a request by F for the re-registration of ownership of a retail investment product to P within a reasonable time.

I didn't realise any SIPP allowed a lift and shift of this sort. In Mrs RCs case it would be hugely beneficial as she's got a big LS80 holding with Cavendish and a load of spare pension allowance headroom, including carryover. If she could have moved that over into a vanguard SIPP over the next 2 tax years, it would have generated a very large tax windfall without having to put any 'new' cash in

do any other providers allow you to do this without the need to liquidate and reinvest?

Not sure if by reference to some sort of 'lift and shift' you are misunderstanding what snowman  or the regulations are talking about, or I am misunderstanding what you are thinking of doing for Mrs RC.

The regulations say that a product provider should co-operate with a request for a re-registration of assets from one party to another, which is what Snowman was discussing.

Are you saying that Mrs RC has a lot of LS80 holdings with Cavendish which are already in a SIPP and wants to move them to a SIPP operated by another pensions provider? That is fine and Cavendish as the platform intermediary and Vanguard as the fund operator should co-operate as long as the receiving SIPP is happy to take on the assets. Vanguard as a receiving pension provider don't accept transfers of assets from other pensions, only transfers of cash, but plenty of other pension providers do accept asset transfers from other pensions (as popular examples, AJ Bell or Hargreaves Lansdown would both accept transfers of SIPP assets from Cavendish).  But I don't see how that process will generate a tax windfall or use her pension allowance headroom.

Are you instead saying that she has assets that are not in a SIPP and she would like to put them in a SIPP? In principle ,she could open a SIPP and that SIPP could acquire them from her, but how would her SIPP be able to pay her for the assets that it was buying from her, if she doesn't first fund it with cash so that she can get the tax relief and then the SIPP will have cash to pay to her to buy the assets from her?   It would be simpler to just sell/redeem the assets, get cash from selling/redeeming them, contribute cash to the new SIPP, and then the SIPP can use its cash pile to buy the same assets from the fund manager after Mrs RC has been out of the market for only a couple of days.

Maybe you are saying that she would like to fund a new SIPP by contributing assets with a known value  of £x in consideration for an agreed contribution of value £x to the SIPP, using up her annual pension allowance to the extent of the £x, instead of first converting her assets to cash and contributing the cash amount £x to the SIPP.  This is allowed by the regulations, but many SIPP providers (especially the cheap DIY ones) do not let you contribute assets with value £x to a pension as a new contribution against your annual allowance, because by the time the assets arrive in the pension they will probably not have the agreed value £x, and will instead have some other value - because the assets change value daily in the case of funds and several times a second in the case of stock exchange traded assets.

So, finding an affordable pension provider that accepts new in-specie pension contributions from outside a pension to fund a new pension is very difficult, as all the cheap ones are set up for high volumes of easy transactions and not smaller volumes of niche, more-complex transactions. So she can't really 'lift' LS80 assets from outside a pension and dump them into a pension. The solution to that is just to sell them and give the pension some cash to buy them again.   Whereas if she already has the LS80 fund assets inside a pension with pension provider A, there are many pension provider Bs who would be happy to take over the administration of those pension assets if she transferred them from SIPP A to SIPP B. It is just that Vanguard as a pension provider wouldn't take them because the vanguard SIPP only accepts incoming cash transfers from other pensions rather than incoming asset transfers from other pensions. 

Yes, currently unwrapped holdings that it would be useful to be able to directly transfer to a pension. Appreciate that would obviously make it impossible to precisely define the input amount, you'd have to accept an end of day price for a specified number of units to transfer, but in our case it wouldn't need to be that precise.

And yes, selling and then repurchasing within the SIPP wrapper is the alternative, but it loses some of the convenience factor as a result...

New_World_Man

I filled in my online forms on 23 Feb to transfer my Utmost pension cash (from EL) to the Vanguard SIPP. Still pending.

bowlhead99

ratechaser said:

bowlhead99 said:

ratechaser said:

SnowMan said:

Dazed_and_C0nfused said:

Looks like they accept DB transfers but only with a positive recommendation.

For DC schemes it is cash transfer only and they don't offer drawdown for the moment.

Quite surprising and a bit disappointing that they don't allow re-registration of Vanguard funds held on other platforms to Vanguard on transfer.

Seems to be a bit against the spirit of the regulations, which while they require providers to offer re-registration as an option when transferring away from a provider they don't require it on transfer to that provider. The FCA rule is here I think, and seems to apply to SIPPs  

https://www.handbook.fca.org.uk/handbook/COBS/6/1G.html?date=2018-01-13&timeline=True

If a client requests a firm (F) to transfer the title to a retail investment product which is held by F directly, or indirectly through a third party, on that client's behalf to another person (P), and F may lawfully transfer the title to that retail investment product to P, F must execute the client's request within a reasonable time and in an efficient manner.

A firm acting as a registrar should carry out a request by F for the re-registration of ownership of a retail investment product to P within a reasonable time.

I didn't realise any SIPP allowed a lift and shift of this sort. In Mrs RCs case it would be hugely beneficial as she's got a big LS80 holding with Cavendish and a load of spare pension allowance headroom, including carryover. If she could have moved that over into a vanguard SIPP over the next 2 tax years, it would have generated a very large tax windfall without having to put any 'new' cash in

do any other providers allow you to do this without the need to liquidate and reinvest?

Not sure if by reference to some sort of 'lift and shift' you are misunderstanding what snowman  or the regulations are talking about, or I am misunderstanding what you are thinking of doing for Mrs RC.

The regulations say that a product provider should co-operate with a request for a re-registration of assets from one party to another, which is what Snowman was discussing.

Are you saying that Mrs RC has a lot of LS80 holdings with Cavendish which are already in a SIPP and wants to move them to a SIPP operated by another pensions provider? That is fine and Cavendish as the platform intermediary and Vanguard as the fund operator should co-operate as long as the receiving SIPP is happy to take on the assets. Vanguard as a receiving pension provider don't accept transfers of assets from other pensions, only transfers of cash, but plenty of other pension providers do accept asset transfers from other pensions (as popular examples, AJ Bell or Hargreaves Lansdown would both accept transfers of SIPP assets from Cavendish).  But I don't see how that process will generate a tax windfall or use her pension allowance headroom.

Are you instead saying that she has assets that are not in a SIPP and she would like to put them in a SIPP? In principle ,she could open a SIPP and that SIPP could acquire them from her, but how would her SIPP be able to pay her for the assets that it was buying from her, if she doesn't first fund it with cash so that she can get the tax relief and then the SIPP will have cash to pay to her to buy the assets from her?   It would be simpler to just sell/redeem the assets, get cash from selling/redeeming them, contribute cash to the new SIPP, and then the SIPP can use its cash pile to buy the same assets from the fund manager after Mrs RC has been out of the market for only a couple of days.

Maybe you are saying that she would like to fund a new SIPP by contributing assets with a known value  of £x in consideration for an agreed contribution of value £x to the SIPP, using up her annual pension allowance to the extent of the £x, instead of first converting her assets to cash and contributing the cash amount £x to the SIPP.  This is allowed by the regulations, but many SIPP providers (especially the cheap DIY ones) do not let you contribute assets with value £x to a pension as a new contribution against your annual allowance, because by the time the assets arrive in the pension they will probably not have the agreed value £x, and will instead have some other value - because the assets change value daily in the case of funds and several times a second in the case of stock exchange traded assets.

So, finding an affordable pension provider that accepts new in-specie pension contributions from outside a pension to fund a new pension is very difficult, as all the cheap ones are set up for high volumes of easy transactions and not smaller volumes of niche, more-complex transactions. So she can't really 'lift' LS80 assets from outside a pension and dump them into a pension. The solution to that is just to sell them and give the pension some cash to buy them again.   Whereas if she already has the LS80 fund assets inside a pension with pension provider A, there are many pension provider Bs who would be happy to take over the administration of those pension assets if she transferred them from SIPP A to SIPP B. It is just that Vanguard as a pension provider wouldn't take them because the vanguard SIPP only accepts incoming cash transfers from other pensions rather than incoming asset transfers from other pensions. 

Yes, currently unwrapped holdings that it would be useful to be able to directly transfer to a pension. Appreciate that would obviously make it impossible to precisely define the input amount, you'd have to accept an end of day price for a specified number of units to transfer, but in our case it wouldn't need to be that precise.

Effectively, based on pension legislation it would have to be that precise, because your pension fund is an independent entity from you as an individual and the Sipp administrator/  trustee who has responsibility for the fund needs to agree with you what your contribution is going to be so that a tax relief claim can be made after you have settled your obligation to fund that amount into the pension as a new contribution within your annual allowance.

The technique of saying that you don't actually know what the assets will be worth but you just want to throw the assets into the pension and they will arrive at some point in the coming weeks, and once the dust has settled you want the scheme administrator to value them at the point they crossed the threshold into your pension and then retrospectively agree with you how much you were agreeing to put into the pension... is something that creates extra work, compliance risk and hassle. So the pension schemes which are more affordable to operate don't accept commitments of assets with unknown and variable value, they accept cold hard cash.

More-expensive-to-administer full-service SIPPs and private pension arrangements will accept contributions of assets with agreed values - an 'in specie' contribution of assets into a pension is allowed by legislation. But for simple affordable pensions of the likes discussed on an MSE forum, that's not something the schemes will accommodate. I

To summarise, if you have an existing asset that's already inside a pension wrapper, an 'in specie' transfer is fine so long as the receiving scheme is happy to take it on. But if you are talking about assets crossing the threshold from outside a pension to inside a pension (an in specie contribution), it's rare to get any provider offering that facility, certainly not the ones that are low cost.