Stakeholder versus SIPP Versus quasi SIPP

SomeMadeUpName

Oh, and my businesses would no longer be occupying the business property, it would be let out commercially for a yield of circa 10% (easily achievable if the purchase price is around £100k).

Albermarle

 Those 0.4-0.5% Stakeholder charges, you say a big SIPP provider charges 0.45% but with fund charges on top, what are fund charges?

A pension , whether it is a SIPP , stakeholder, personal pension , workplace pension etc is just an administrative entity that processes payments in and out , deals with tax etc . Your money is actually invested in investments funds within the pension .

The choice of funds can be as low as five , or can be thousands , and anything inbetween . Clearly new inexperienced investors are better off with limited choice where the options are clearly explained .

Typically there is a charge for the pension , often called a platform charge and then there is a charge for the funds themselves .

However some simpler pensions, like stakeholders just have one charge .

I think you need to step back and do some more reading before taking any actions . You are talking about getting into a complex arrangement with a property, whilst not understanding how even simple pensions work . Here are some links 

https://www.moneysavingexpert.com/investments/

https://www.nutmeg.com/new-to-investing

https://www.fidelity.co.uk/planning-guidance/how-to-invest/?p=0&c=10

https://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics

SomeMadeUpName

Albermarle said:

 Those 0.4-0.5% Stakeholder charges, you say a big SIPP provider charges 0.45% but with fund charges on top, what are fund charges?

A pension , whether it is a SIPP , stakeholder, personal pension , workplace pension etc is just an administrative entity that processes payments in and out , deals with tax etc . Your money is actually invested in investments funds within the pension .

The choice of funds can be as low as five , or can be thousands , and anything inbetween . Clearly new inexperienced investors are better off with limited choice where the options are clearly explained .

Typically there is a charge for the pension , often called a platform charge and then there is a charge for the funds themselves .

However some simpler pensions, like stakeholders just have one charge .

I think you need to step back and do some more reading before taking any actions . You are talking about getting into a complex arrangement with a property, whilst not understanding how even simple pensions work . Here are some links 

https://www.moneysavingexpert.com/investments/

https://www.nutmeg.com/new-to-investing

https://www.fidelity.co.uk/planning-guidance/how-to-invest/?p=0&c=10

https://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics

Hi, thx for the further input.

First off, my mistake here, was ever mentioning the business property. I thought I'ld made it clear that was something I was thinking about (and only thinking about) for several years time, but instead by mentioning it I've rabbit holed the whole conversation and taken the focus off what I wanted to know now.

I need to act now to put funds in a pot for myself and my wife this financial year (so I have a month basically). Otherwise I miss out on £1440 of free money courtesy of HMGov. 
I seem to have established that transfer fees are a thing of the past, so unless I'm missing something the choice is not too critical as I can just transfer somewhere else in a few months or a year when I have more knowledge.
I'm thinking Vanguard quasi SIPP for me as it is simple, low cost and will be a reasonable home for my £60k pot to be transferred into in 6 months time.
I'm thinking Vanguard quasi SIPP or Stakeholder for the missus as they are simple and low cost. I'm still a bit unclear on whether the platform charges (which may incorporate fund charges) on a Stakeholder are sufficiently lower than those on Vanguard that it makes it a better option for my wife and her very small pot (ie starting now and adding £3600 after tax back pa).

It's that latter piece I need to sort now (not the business property) and unfortunately I can't step back for too long a it needs to be done this month.

So..........thoughts?

AlanP_2

SomeMadeUpName said:

Oh, and my businesses would no longer be occupying the business property, it would be let out commercially for a yield of circa 10% (easily achievable if the purchase price is around £100k).

If you have a business, and if it is a Ltd company, why are you making the pension contributions and not the Ltd company?

SomeMadeUpName

AlanP_2 said:

SomeMadeUpName said:

Oh, and my businesses would no longer be occupying the business property, it would be let out commercially for a yield of circa 10% (easily achievable if the purchase price is around £100k).

If you have a business, and if it is a Ltd company, why are you making the pension contributions and not the Ltd company?

Because as a non taxpayer anyway at the moment it makes no difference.
In fact if I paid £2880 from the Co then that's all it would be, £2880. If instead I pay it out of the Co to me then pay it into the pension as an individual the £2880 becomes £3600, so it does make a difference, it's way better.

Albermarle

Should be no issue to go with Vanguard for both of you with these types of sums . Platform fee is 0.15% and fund fees are not high . There is a reasonable choice of funds , although only Vanguard funds are possible . For a lot of smaller investors that is a non issue.

SomeMadeUpName

Many thanks to everyone who is giving me input, every comment teaches me something, or points me to where I can educate myself (you don't know what you don't know).
So I've had a squidge at the two Stakeholder pensions mentioned above in a post. They both charge 1% which appears to be the platform charge and fund charge combined. 
Vanguard is 0.45% platform charge I believe, so what are fund charges likely to be? That's my current question.
I am slowly working towards a decision, and everyone's help is appreciated.

SomeMadeUpName

Albermarle said:

Should be no issue to go with Vanguard for both of you with these types of sums . Platform fee is 0.15% and fund fees are not high . There is a reasonable choice of funds , although only Vanguard funds are possible . For a lot of smaller investors that is a non issue.

Hi, thx for that, you answered my current question even as I was writing the post to highlight it.
So Vanguard is only 0.15%, wow that is cheap, I had thought 0.45% (must have conflated some figures on something else). 

dunstonh

SomeMadeUpName said:

AlanP_2 said:

SomeMadeUpName said:

Oh, and my businesses would no longer be occupying the business property, it would be let out commercially for a yield of circa 10% (easily achievable if the purchase price is around £100k).

If you have a business, and if it is a Ltd company, why are you making the pension contributions and not the Ltd company?

Because as a non taxpayer anyway at the moment it makes no difference.
In fact if I paid £2880 from the Co then that's all it would be, £2880. If instead I pay it out of the Co to me then pay it into the pension as an individual the £2880 becomes £3600, so it does make a difference, it's way better.

You can pay £40,000 from the company (ignoring carry forward potential).  You are not limited to your earnings.   In reality, you are limited to your profit if less than £40,000 as you wont be reducing CT if you go over the profit.

So I've had a squidge at the two Stakeholder pensions mentioned above in a post. They both charge 1% which appears to be the platform charge and fund charge combined. 

They are the old default maximums.   Those dont apply since 2013.     Stakeholder pensions are not platforms.  They are mono charged (a single AMC).   

Vanguard is 0.45% platform charge I believe, so what are fund charges likely to be? 

Vanguard is 0.15% plus say 0.22% on fund.     0.45% is for HL (the largest DIY platform)

SomeMadeUpName

dunstonh said:

SomeMadeUpName said:

AlanP_2 said:

SomeMadeUpName said:

Oh, and my businesses would no longer be occupying the business property, it would be let out commercially for a yield of circa 10% (easily achievable if the purchase price is around £100k).

If you have a business, and if it is a Ltd company, why are you making the pension contributions and not the Ltd company?

Because as a non taxpayer anyway at the moment it makes no difference.
In fact if I paid £2880 from the Co then that's all it would be, £2880. If instead I pay it out of the Co to me then pay it into the pension as an individual the £2880 becomes £3600, so it does make a difference, it's way better.

You can pay £40,000 from the company (ignoring carry forward potential).  You are not limited to your earnings.   In reality, you are limited to your profit if less than £40,000 as you wont be reducing CT if you go over the profit.

So I've had a squidge at the two Stakeholder pensions mentioned above in a post. They both charge 1% which appears to be the platform charge and fund charge combined. 

They are the old default maximums.   Those dont apply since 2013.     Stakeholder pensions are not platforms.  They are mono charged (a single AMC).   

Vanguard is 0.45% platform charge I believe, so what are fund charges likely to be? 

Vanguard is 0.15% plus say 0.22% on fund.     0.45% is for HL (the largest DIY platform)

Thx again

Every reply teaches me new stuff. I did not know that the company can pay me any amount into pension. So as soon as my incomes are up to the taxable threshold I will start sending payments direct from the company into a pension pot. That won't be this year though, not with Covid on the prowl! Actually maybe better to the wife as then that would even up the pot I've already got whilst she starts from scratch.

Hang on though. reading again you don't say unlimited, you actually say upto £40k and not limited to earnings. So if I was paying myself say £12,500 already (ignoring any other income sources) plus had £40k kicking about in the Co I could either send £40k to pension from the company and it lands as £40k, or I could pay myself £40k, get taxed on it then send the net to a pension (because now my income is large enough that the payment is ok under the rules) some tax would be recovered auto by the pension and some on my tax return, but net effect is that it all comes back so no real difference.

Except of course NI, which IS significant. So yes definitely better straight from the Co. BUT not until I'm a tax payer (so not this year, which is closing in a month). I seem to remember that now, as in maybe 2005 a guy who was working for me wanted £40k of his bonus diverting straight to his pension in March. We did it as it saved us NI, he wanted it as he wanted to stay under 40% tax and not have to fill in a tax return as he'ld seen the back of them a few years earlier and didn't want to start again. Is that right, could it really have been £40k back in 2005 and still only be £40k now, or is my memory failing me?