IWeb Sipp Drawdown Charges: 1.1% pa. Is this correct?

_pete_

I've just received a Key Features illustration from IWeb as I'm intending to take out 25% of my SIPP as a tax free lump sum.  The illustration says that charges will reduce the value of my investment by 1.1% pa.  My portfolio is invested in the Vanguard LS60 and the HSBC Global Balanced funds with OCFs of 0.22% and 0.17% respectively.

I've asked IWeb to clarify how they arrived at the 1.1% figure for charges (which is obviously much higher than I anticipated, having deliberately chosen to invest in funds with low charges) but while I wait for their response, could anyone here shed any light?

eskbanker

https://www.iweb-sharedealing.co.uk/charges-and-interest-rates/sipp-charges.asp explains their charges, but they're mostly fixed fees rather than percentages - what is the value of your SIPP?

_pete_

eskbanker said:

https://www.iweb-sharedealing.co.uk/charges-and-interest-rates/sipp-charges.asp explains their charges, but they're mostly fixed fees rather than percentages - what is the value of your SIPP?

£300k approx.  The fixed fees don't add up to anything like 1%.

ffacoffipawb

_pete_ said:

eskbanker said:

https://www.iweb-sharedealing.co.uk/charges-and-interest-rates/sipp-charges.asp explains their charges, but they're mostly fixed fees rather than percentages - what is the value of your SIPP?

£300k approx.  The fixed fees don't add up to anything like 1%.

It probably includes your fund charges as well.

_pete_

ffacoffipawb said:

_pete_ said:

eskbanker said:

https://www.iweb-sharedealing.co.uk/charges-and-interest-rates/sipp-charges.asp explains their charges, but they're mostly fixed fees rather than percentages - what is the value of your SIPP?

£300k approx.  The fixed fees don't add up to anything like 1%.

It probably includes your fund charges as well.

I thought the fund charges were 0.22% (Vanguard LS) and 0.17% (HSBC Global Balanced)?  What other fund charges are there?

ffacoffipawb

_pete_ said:

ffacoffipawb said:

_pete_ said:

eskbanker said:

https://www.iweb-sharedealing.co.uk/charges-and-interest-rates/sipp-charges.asp explains their charges, but they're mostly fixed fees rather than percentages - what is the value of your SIPP?

£300k approx.  The fixed fees don't add up to anything like 1%.

It probably includes your fund charges as well.

I thought the fund charges were 0.22% (Vanguard LS) and 0.17% (HSBC Global Balanced)?  What other fund charges are there?

Sorry, missed that bit.
OK...

Fund charge is 0.20% average.
SIPP admin charge of £180 plus flexi access drawdown of £180 is £360 which is 0.12% (assuming the £300k is after the £100k PCLS has been taken).

Total is 0.32%.

I wonder if they are assuming a generic fund charge of 1% regardless of your actual investments as I cannot see any other charges that I have missed.

ffacoffipawb

I should add, I have a small SIPP with Hargreaves Lansdown wholly invested in cash which I am taking a PCLS from and moving 3 times this into drawdown but taking no income at this stage.

There are no charges as it is just uninvested cash.

The drawdown illustration shows a charge impact on the fund of charges of 0.70%. Makes no sense to me.

_pete_

I wonder if they are assuming a generic fund charge of 1% regardless of your actual investments as I cannot see any other charges that I have missed.

Yes, I'm wondering the same - I guess they use standard figures for projected low/medium/high growth, so perhaps they use a standard fund charge figure too, for comparision purposes.

I've also realised that they charge a 0.5% transaction charge per fund deal, which amounts to £450 when I sell £75k worth of fund so I can draw it down in cash.

ffacoffipawb

_pete_ said:

I wonder if they are assuming a generic fund charge of 1% regardless of your actual investments as I cannot see any other charges that I have missed.

Yes, I'm wondering the same - I guess they use standard figures for projected low/medium/high growth, so perhaps they use a standard fund charge figure too, for comparision purposes.

I've also realised that they charge a 0.5% transaction charge per fund deal, which amounts to £450 when I sell £75k worth of fund so I can draw it down in cash.

I dont think the fund deal can possibly cost that much. AJ Bell charge £1 for a fund deal and Hargreaves Lansdown charge nothing.

sabretoothtigger

sounds like an exit fee

dunstonh

I should add, I have a small SIPP with Hargreaves Lansdown wholly invested in cash which I am taking a PCLS from and moving 3 times this into drawdown but taking no income at this stage.

There are no charges as it is just uninvested cash.

The drawdown illustration shows a charge impact on the fund of charges of 0.70%. Makes no sense to me.

The figures use assumptions as you have not selected your investment funds yet.