Opinions on my SIPP with HL

morrow56

Thanks Bowlhead I am 63 next monthsand plan to retire in Nov 2023
current state pension forecast is for £11,211 a year at April 2020  - so possible 3 years at 2.5% triple lock element to added to that

morrow56

My plan at the moment is to retire at a higher lever of income than I am currently bringing home
Therefore aiming for about 21k when all pensions are added up before tax with a pot of 11k in cash too.
Not easy when you have been a minimum wage earner for last 7 years.

squirrelpie

It might be worth noting that HL's 0.45% charge only applies to funds. There's a cash limit on charges for investments in shares etc. So together with the no charges for drawdown, this can make the picture look noticeably different, depending on the balance in your SIPP.

Albermarle

Joey_Soap said:

garmeg said:

Joey_Soap said:

Not a comment on the holdings at all. But let's say you decide to drawdown from your SIPP at a rate of say 3% of the pot's value each year. I want to point out that by using HL, out of the 3% you have to pay 0.45% to HL in fees. Leaving you with precisely 2.55% of your pot each year as drawdown. That's a truly massive hit to your income every year. I'd shop around if I were you to try to drive down that monthly fee. HTH.

The 0.45% comes out of the fund not the drawdown amount so they can still take 3% and get 3%.
The funds also have charges (probably 0.5% on average as the Vanguard fund is cheap) so you need to allow for that too.
Whether a 3% drawdown is sensible or not is a separate issue. 

There is no magic money tree. It's still his money and HL still grasp 0.45% off him. Whether it's 3% or 3.45% drawdown, HL still take their pound of flesh and 3.45% is a lot less sustainable drawdown than 3%. The underlying fund fees you can nothing about as long as you hold funds. And hopefully, the funds add wealth over time. That's what you pay the funds to do. But HL do nothing but syphon off the wealth that the funds hopefully create for you. HTH.

The OP has a pot of approx. £30K so a % charge based provider makes sense:
The funds will cost the same whoever they are with so the annual platform charges are :
HL - £135
Aj Bell - £75 + drawdown costs later 
Vanguard ( limited fund choice ) - £45
So by avoiding HL 'taking their pound of flesh' the OP will not exactly transform their pension income !

You could just as easily argue that for £135 you in fact get very good value for money . 

zagfles

Albermarle said:

Joey_Soap said:

garmeg said:

Joey_Soap said:

Not a comment on the holdings at all. But let's say you decide to drawdown from your SIPP at a rate of say 3% of the pot's value each year. I want to point out that by using HL, out of the 3% you have to pay 0.45% to HL in fees. Leaving you with precisely 2.55% of your pot each year as drawdown. That's a truly massive hit to your income every year. I'd shop around if I were you to try to drive down that monthly fee. HTH.

The 0.45% comes out of the fund not the drawdown amount so they can still take 3% and get 3%.
The funds also have charges (probably 0.5% on average as the Vanguard fund is cheap) so you need to allow for that too.
Whether a 3% drawdown is sensible or not is a separate issue. 

There is no magic money tree. It's still his money and HL still grasp 0.45% off him. Whether it's 3% or 3.45% drawdown, HL still take their pound of flesh and 3.45% is a lot less sustainable drawdown than 3%. The underlying fund fees you can nothing about as long as you hold funds. And hopefully, the funds add wealth over time. That's what you pay the funds to do. But HL do nothing but syphon off the wealth that the funds hopefully create for you. HTH.

The OP has a pot of approx. £30K so a % charge based provider makes sense:
The funds will cost the same whoever they are with so the annual platform charges are :
HL - £135
Aj Bell - £75 + drawdown costs later 
Vanguard ( limited fund choice ) - £45
So by avoiding HL 'taking their pound of flesh' the OP will not exactly transform their pension income !

You could just as easily argue that for £135 you in fact get very good value for money . 

And with II, the annual charge would be £240, plus possible trading costs. So it seems II will take even more "pounds of flesh"  than HL

Joey_Soap

zagfles said:

Albermarle said:

Joey_Soap said:

garmeg said:

Joey_Soap said:

Not a comment on the holdings at all. But let's say you decide to drawdown from your SIPP at a rate of say 3% of the pot's value each year. I want to point out that by using HL, out of the 3% you have to pay 0.45% to HL in fees. Leaving you with precisely 2.55% of your pot each year as drawdown. That's a truly massive hit to your income every year. I'd shop around if I were you to try to drive down that monthly fee. HTH.

The 0.45% comes out of the fund not the drawdown amount so they can still take 3% and get 3%.
The funds also have charges (probably 0.5% on average as the Vanguard fund is cheap) so you need to allow for that too.
Whether a 3% drawdown is sensible or not is a separate issue. 

There is no magic money tree. It's still his money and HL still grasp 0.45% off him. Whether it's 3% or 3.45% drawdown, HL still take their pound of flesh and 3.45% is a lot less sustainable drawdown than 3%. The underlying fund fees you can nothing about as long as you hold funds. And hopefully, the funds add wealth over time. That's what you pay the funds to do. But HL do nothing but syphon off the wealth that the funds hopefully create for you. HTH.

The OP has a pot of approx. £30K so a % charge based provider makes sense:
The funds will cost the same whoever they are with so the annual platform charges are :
HL - £135
Aj Bell - £75 + drawdown costs later 
Vanguard ( limited fund choice ) - £45
So by avoiding HL 'taking their pound of flesh' the OP will not exactly transform their pension income !

You could just as easily argue that for £135 you in fact get very good value for money . 

And with II, the annual charge would be £240, plus possible trading costs. So it seems II will take even more "pounds of flesh"  than HL

I don't think anyone here is advocating Interactive Investor in this case? It would be inappropriate on a small pot of money. Where But HL are charging 0.45%, around 0.25% is easily available for the same thing. Good point about drawdown fees. But not every platform applies them and one platform recently stopped applying it. So, it's important to research for each case, that's very clear. What's also clear, is that with a limited amount of money in the pot, being very careful with platform charges is extremely important.

Joey_Soap

zagfles said:

Albermarle said:

Joey_Soap said:

garmeg said:

Joey_Soap said:

Not a comment on the holdings at all. But let's say you decide to drawdown from your SIPP at a rate of say 3% of the pot's value each year. I want to point out that by using HL, out of the 3% you have to pay 0.45% to HL in fees. Leaving you with precisely 2.55% of your pot each year as drawdown. That's a truly massive hit to your income every year. I'd shop around if I were you to try to drive down that monthly fee. HTH.

The 0.45% comes out of the fund not the drawdown amount so they can still take 3% and get 3%.
The funds also have charges (probably 0.5% on average as the Vanguard fund is cheap) so you need to allow for that too.
Whether a 3% drawdown is sensible or not is a separate issue. 

There is no magic money tree. It's still his money and HL still grasp 0.45% off him. Whether it's 3% or 3.45% drawdown, HL still take their pound of flesh and 3.45% is a lot less sustainable drawdown than 3%. The underlying fund fees you can nothing about as long as you hold funds. And hopefully, the funds add wealth over time. That's what you pay the funds to do. But HL do nothing but syphon off the wealth that the funds hopefully create for you. HTH.

The OP has a pot of approx. £30K so a % charge based provider makes sense:
The funds will cost the same whoever they are with so the annual platform charges are :
HL - £135
Aj Bell - £75 + drawdown costs later 
Vanguard ( limited fund choice ) - £45
So by avoiding HL 'taking their pound of flesh' the OP will not exactly transform their pension income !

You could just as easily argue that for £135 you in fact get very good value for money . 

And with II, the annual charge would be £240, plus possible trading costs. So it seems II will take even more "pounds of flesh"  than HL

No, that's not correct. II would now charge £120 per year for a SIPP, whether in drawdown or not. But they are not an appropriate choice platform for this amount of money.

zagfles

Joey_Soap said:

zagfles said:

Albermarle said:

Joey_Soap said:

garmeg said:

Joey_Soap said:

Not a comment on the holdings at all. But let's say you decide to drawdown from your SIPP at a rate of say 3% of the pot's value each year. I want to point out that by using HL, out of the 3% you have to pay 0.45% to HL in fees. Leaving you with precisely 2.55% of your pot each year as drawdown. That's a truly massive hit to your income every year. I'd shop around if I were you to try to drive down that monthly fee. HTH.

The 0.45% comes out of the fund not the drawdown amount so they can still take 3% and get 3%.
The funds also have charges (probably 0.5% on average as the Vanguard fund is cheap) so you need to allow for that too.
Whether a 3% drawdown is sensible or not is a separate issue. 

There is no magic money tree. It's still his money and HL still grasp 0.45% off him. Whether it's 3% or 3.45% drawdown, HL still take their pound of flesh and 3.45% is a lot less sustainable drawdown than 3%. The underlying fund fees you can nothing about as long as you hold funds. And hopefully, the funds add wealth over time. That's what you pay the funds to do. But HL do nothing but syphon off the wealth that the funds hopefully create for you. HTH.

The OP has a pot of approx. £30K so a % charge based provider makes sense:
The funds will cost the same whoever they are with so the annual platform charges are :
HL - £135
Aj Bell - £75 + drawdown costs later 
Vanguard ( limited fund choice ) - £45
So by avoiding HL 'taking their pound of flesh' the OP will not exactly transform their pension income !

You could just as easily argue that for £135 you in fact get very good value for money . 

And with II, the annual charge would be £240, plus possible trading costs. So it seems II will take even more "pounds of flesh"  than HL

No, that's not correct. II would now charge £120 per year for a SIPP, whether in drawdown or not. But they are not an appropriate choice platform for this amount of money.

That's not what it says here https://www.ii.co.uk/ii-accounts/sipp/sipp-charges

• Your £9.99 service plan fee gives you access to the widest range of investments on the market.
• The SIPP fee is just £10 a month extra*, bringing the total cost to £19.99 per month.

zagfles

Joey_Soap said:

zagfles said:

Albermarle said:

Joey_Soap said:

garmeg said:

Joey_Soap said:

Not a comment on the holdings at all. But let's say you decide to drawdown from your SIPP at a rate of say 3% of the pot's value each year. I want to point out that by using HL, out of the 3% you have to pay 0.45% to HL in fees. Leaving you with precisely 2.55% of your pot each year as drawdown. That's a truly massive hit to your income every year. I'd shop around if I were you to try to drive down that monthly fee. HTH.

The 0.45% comes out of the fund not the drawdown amount so they can still take 3% and get 3%.
The funds also have charges (probably 0.5% on average as the Vanguard fund is cheap) so you need to allow for that too.
Whether a 3% drawdown is sensible or not is a separate issue. 

There is no magic money tree. It's still his money and HL still grasp 0.45% off him. Whether it's 3% or 3.45% drawdown, HL still take their pound of flesh and 3.45% is a lot less sustainable drawdown than 3%. The underlying fund fees you can nothing about as long as you hold funds. And hopefully, the funds add wealth over time. That's what you pay the funds to do. But HL do nothing but syphon off the wealth that the funds hopefully create for you. HTH.

The OP has a pot of approx. £30K so a % charge based provider makes sense:
The funds will cost the same whoever they are with so the annual platform charges are :
HL - £135
Aj Bell - £75 + drawdown costs later 
Vanguard ( limited fund choice ) - £45
So by avoiding HL 'taking their pound of flesh' the OP will not exactly transform their pension income !

You could just as easily argue that for £135 you in fact get very good value for money . 

And with II, the annual charge would be £240, plus possible trading costs. So it seems II will take even more "pounds of flesh"  than HL

I don't think anyone here is advocating Interactive Investor in this case? It would be inappropriate on a small pot of money. Where But HL are charging 0.45%, around 0.25% is easily available for the same thing. Good point about drawdown fees. But not every platform applies them and one platform recently stopped applying it. So, it's important to research for each case, that's very clear. What's also clear, is that with a limited amount of money in the pot, being very careful with platform charges is extremely important.

Which is why I pointed at Snowman's spreadsheet which will work out the charges based on investment amount, type etc. Rather than the generic assertion we get here all the time that HL are expensive. For the OP they are likely to be at the cheaper end of the scale.

Joey_Soap

zagfles said:

Joey_Soap said:

zagfles said:

Albermarle said:

Joey_Soap said:

garmeg said:

Joey_Soap said:

Not a comment on the holdings at all. But let's say you decide to drawdown from your SIPP at a rate of say 3% of the pot's value each year. I want to point out that by using HL, out of the 3% you have to pay 0.45% to HL in fees. Leaving you with precisely 2.55% of your pot each year as drawdown. That's a truly massive hit to your income every year. I'd shop around if I were you to try to drive down that monthly fee. HTH.

The 0.45% comes out of the fund not the drawdown amount so they can still take 3% and get 3%.
The funds also have charges (probably 0.5% on average as the Vanguard fund is cheap) so you need to allow for that too.
Whether a 3% drawdown is sensible or not is a separate issue. 

There is no magic money tree. It's still his money and HL still grasp 0.45% off him. Whether it's 3% or 3.45% drawdown, HL still take their pound of flesh and 3.45% is a lot less sustainable drawdown than 3%. The underlying fund fees you can nothing about as long as you hold funds. And hopefully, the funds add wealth over time. That's what you pay the funds to do. But HL do nothing but syphon off the wealth that the funds hopefully create for you. HTH.

The OP has a pot of approx. £30K so a % charge based provider makes sense:
The funds will cost the same whoever they are with so the annual platform charges are :
HL - £135
Aj Bell - £75 + drawdown costs later 
Vanguard ( limited fund choice ) - £45
So by avoiding HL 'taking their pound of flesh' the OP will not exactly transform their pension income !

You could just as easily argue that for £135 you in fact get very good value for money . 

And with II, the annual charge would be £240, plus possible trading costs. So it seems II will take even more "pounds of flesh"  than HL

No, that's not correct. II would now charge £120 per year for a SIPP, whether in drawdown or not. But they are not an appropriate choice platform for this amount of money.

That's not what it says here https://www.ii.co.uk/ii-accounts/sipp/sipp-charges

• Your £9.99 service plan fee gives you access to the widest range of investments on the market.
• The SIPP fee is just £10 a month extra*, bringing the total cost to £19.99 per month.

OK, we weren't talking about the exact same thing then. On it's own, the II SIPP now costs £10 per month, whereas prior to October 1st it cost £10. + £10 more if it was in drawdown, £20 total. The £10 drawdown fee has now gone, leaving a flat £10 for the II SIPP. The £9.99 you quoted buys you the trading account and ISA on the II platform.