SIPP platform charges

Madeinireland101

I currently have a SIPP with iweb to the value of approximately £230k. For the benefit of holding this sum iweb charge me £45 a quarter and therefore £180 a year. As a result of having an overall pension that currently slightly exceeds the LTA I am planning to crystallise the SIPP I hold with iweb and take out the tax free lump sum 25%. This will take me into drawdown with iweb although I have no wish to withdraw any further sums anytime soon. For the benefit of this iweb will then charge me another £180 per annum from that point as I would have gone into Flexi-access drawdown in their charging structure. This would mean total charges of £360 per annum.

Does anyone know if there are any other platforms that would provide a charging structure that would be better for me?  If I was truly withdrawing from the scheme on an annum basis I could understand but it may be many years before I start withdrawing and it feels like my charges are doubling on an annual basis as a result of a single transaction.
Thanks...

dunstonh

Does anyone know if there are any other platforms that would provide a charging structure that would be better for me?

Platform charges vary.  Some platforms focus on different types of assets.   Shares, ITs, ETFs, UT/OEICs, insured funds etc.   

Some platform charge for transactions.  Some do not.   So, you need to consider the assets you are investing in and any movements you make throughout the year.

If I was truly withdrawing from the scheme on an annum basis I could understand but it may be many years before I start withdrawing and it feels like my charges are doubling on an annual basis as a result of a single transaction.

Your platform charges equate to 0.156% which is very low for £230k. 

Croeso69

Madeinireland101 said:

I currently have a SIPP with iweb to the value of approximately £230k. For the benefit of holding this sum iweb charge me £45 a quarter and therefore £180 a year. As a result of having an overall pension that currently slightly exceeds the LTA I am planning to crystallise the SIPP I hold with iweb and take out the tax free lump sum 25%. This will take me into drawdown with iweb although I have no wish to withdraw any further sums anytime soon. For the benefit of this iweb will then charge me another £180 per annum from that point as I would have gone into Flexi-access drawdown in their charging structure. This would mean total charges of £360 per annum.

Does anyone know if there are any other platforms that would provide a charging structure that would be better for me?  If I was truly withdrawing from the scheme on an annum basis I could understand but it may be many years before I start withdrawing and it feels like my charges are doubling on an annual basis as a result of a single transaction.
Thanks...

If this was crystallised and was held with Youinvest directly you would be paying £120 a year if it were all shares / ETF / IT so much cheaper (though dealing costs will be higher),

It would be 0.25%x (£230k x 0.75) = £431 if wholly funds / OEICS so iweb are slightly cheaper. As the fund value drops as you take income (eventually), Youinvest would become cheaper for funds (funds below £360 / 0.0025 = £144,000 c.f. your crystallised fund of £172,500 post PCLS).

IvanOpinion

You could try plugging your numbers in here http://www.comparefundplatforms.com/.  Unfortunately it doesn't seem to take into account drawdown charges.

Croeso69

dunstonh said:

Does anyone know if there are any other platforms that would provide a charging structure that would be better for me?

Platform charges vary.  Some platforms focus on different types of assets.   Shares, ITs, ETFs, UT/OEICs, insured funds etc.   

Some platform charge for transactions.  Some do not.   So, you need to consider the assets you are investing in and any movements you make throughout the year.

If I was truly withdrawing from the scheme on an annum basis I could understand but it may be many years before I start withdrawing and it feels like my charges are doubling on an annual basis as a result of a single transaction.

Your platform charges equate to 0.156% which is very low for £230k. 

Post crystallisation funds would be £172,500 so fee is 0.2087% - still not bad.

As fund drops due to taking drawdown the percentage will rise.

For a fund of £50,001 the platform charge is effectively 0.72% which is a lot more expensive than Hargreaves Lansdown.

For a fund of £50,000 (quarterly fees halve at this point but drawdown fee is still £180) the platform charge is effectively 0.54% which is still more expensive than Hargreaves Lansdown.

So i-web doesn't look competitive for smaller SIPPs.

Madeinireland101

dunstonh said:

Does anyone know if there are any other platforms that would provide a charging structure that would be better for me?

Platform charges vary.  Some platforms focus on different types of assets.   Shares, ITs, ETFs, UT/OEICs, insured funds etc.   

Some platform charge for transactions.  Some do not.   So, you need to consider the assets you are investing in and any movements you make throughout the year.

If I was truly withdrawing from the scheme on an annum basis I could understand but it may be many years before I start withdrawing and it feels like my charges are doubling on an annual basis as a result of a single transaction.

Your platform charges equate to 0.156% which is very low for £230k. 

Thanks - I am currently 60  and I had hoped to not touch this SIPP and pass it on as an inheritance - though I do realise I would probably need to drawdown on it any growth before 75 to prevent LTA charges. It would be held as funds (e.g Vanguard LS). No movements anticipated unless circumstances change.

Madeinireland101

Croeso69 said:

Madeinireland101 said:

I currently have a SIPP with iweb to the value of approximately £230k. For the benefit of holding this sum iweb charge me £45 a quarter and therefore £180 a year. As a result of having an overall pension that currently slightly exceeds the LTA I am planning to crystallise the SIPP I hold with iweb and take out the tax free lump sum 25%. This will take me into drawdown with iweb although I have no wish to withdraw any further sums anytime soon. For the benefit of this iweb will then charge me another £180 per annum from that point as I would have gone into Flexi-access drawdown in their charging structure. This would mean total charges of £360 per annum.

Does anyone know if there are any other platforms that would provide a charging structure that would be better for me?  If I was truly withdrawing from the scheme on an annum basis I could understand but it may be many years before I start withdrawing and it feels like my charges are doubling on an annual basis as a result of a single transaction.
Thanks...

If this was crystallised and was held with Youinvest directly you would be paying £120 a year if it were all shares / ETF / IT so much cheaper (though dealing costs will be higher),

It would be 0.25%x (£230k x 0.75) = £431 if wholly funds / OEICS so iweb are slightly cheaper. As the fund value drops as you take income (eventually), Youinvest would become cheaper for funds (funds below £360 / 0.0025 = £144,000 c.f. your crystallised fund of £172,500 post PCLS).

Thanks - As per my comment on previous reply I hope to not withdraw below current value but if I did I presume I could transfer to YouInvest at that point if I felt worth it?

Madeinireland101

Croeso69 said:

dunstonh said:

Does anyone know if there are any other platforms that would provide a charging structure that would be better for me?

Platform charges vary.  Some platforms focus on different types of assets.   Shares, ITs, ETFs, UT/OEICs, insured funds etc.   

Some platform charge for transactions.  Some do not.   So, you need to consider the assets you are investing in and any movements you make throughout the year.

If I was truly withdrawing from the scheme on an annum basis I could understand but it may be many years before I start withdrawing and it feels like my charges are doubling on an annual basis as a result of a single transaction.

Your platform charges equate to 0.156% which is very low for £230k. 

Post crystallisation funds would be £172,500 so fee is 0.2087% - still not bad.

As fund drops due to taking drawdown the percentage will rise.

For a fund of £50,001 the platform charge is effectively 0.72% which is a lot more expensive than Hargreaves Lansdown.

For a fund of £50,000 (quarterly fees halve at this point but drawdown fee is still £180) the platform charge is effectively 0.54% which is still more expensive than Hargreaves Lansdown.

So i-web doesn't look competitive for smaller SIPPs.

Thanks - as per comments above I hope to retain value at current level but I can see I need to be careful should I withdraw  - one thing I didn’t mention is that I have another smaller SIPP with Hargreaves Lansdown so it sounds like it would be best for me to combine them together in iweb at this stage or after I have crystallised them both.

EdSwippet

Madeinireland101 said:

Does anyone know if there are any other platforms that would provide a charging structure that would be better for me?

Interactive Investor? Charges are £9.99 platform and £10 SIPP monthly, one free trade a month and no added drawdown charge. Also, none of the silly HL and Youinvest style split charging structure that penalises funds and OEICs compared to ETFs. A few pennies under £120/year £240/year, then.

Croeso69

EdSwippet said:

Madeinireland101 said:

Does anyone know if there are any other platforms that would provide a charging structure that would be better for me?

Interactive Investor? Charges are £9.99 platform and £10 SIPP monthly, one free trade a month and no added drawdown charge. Also, none of the silly HL and Youinvest style split charging structure that penalises funds and OEICs compared to ETFs. A few pennies under £120/year, then.

You meant a few pennies under £240 presumably (platform plus SIPP).

cloud_dog

If holding non-OEICs, Fidelity platform charge is £45pa (may have increased slightly recently; changed to being charged monthly rather than quarterly), and they do not make charge for drawdown (unless you take advice).
https://help.fidelity.co.uk/site/our-charges/charges-for-drawdown