Why use a SIPP and workplace pension together?

granta

Prism said:

0.39% in Scottish Widows. SW funds are free but some others add a little on top.

Thanks all for the feedback, interesting seeing the wide range of fees.

My old Scottish Widows pension (started 2005ish) is 1% for in house funds and 1.75%ish external ones, so quite different to that of @Prism. After learning lots on this Forum this past year, I have transferred out of that one.

I have 3 different pensions with Aviva, one at 1%, another 0.5%, and most recently, the same employer has switched to a a new Aviva product that is 0.29% all in for the default fund (which looks decent to me). So I realise I am onto a good thing with the latest one.

happybagger

My last employer changed to a Master Trust and had a charge of 0.17%, I only paid in up to the maximum that the employer matched. Now self-employed so opened a SIPP, and paid in up to the total amount of my earned income for that year before the year ended (2020-21). Before the tax contribution of course.

Prism

granta said:

Prism said:

0.39% in Scottish Widows. SW funds are free but some others add a little on top.

Thanks all for the feedback, interesting seeing the wide range of fees.

My old Scottish Widows pension (started 2005ish) is 1% for in house funds and 1.75%ish external ones, so quite different to that of @Prism. After learning lots on this Forum this past year, I have transferred out of that one.

I have 3 different pensions with Aviva, one at 1%, another 0.5%, and most recently, the same employer has switched to a a new Aviva product that is 0.29% all in for the default fund (which looks decent to me). So I realise I am onto a good thing with the latest one.

Its likely the same pension type - its just that larger companies tend to get a discount rate from the 1%

isayhello

Thanks for the replies.

As I'm in a situation where I have a current workplace pension and also an older pension from previous jobs with another provider, does it make sense to move the old one to a SIPP? The old one is with Prudential.

The benefit it seems would be that I'd have a wider range of funds I could invest in and if I pick carefully then lower charges maybe as well?

eskbanker

isayhello said:

Thanks for the replies.

As I'm in a situation where I have a current workplace pension and also an older pension from previous jobs with another provider, does it make sense to move the old one to a SIPP? The old one is with Prudential.

The benefit it seems would be that I'd have a wider range of funds I could invest in and if I pick carefully then lower charges maybe as well?

It isn't really meaningful to generalise - you'd need to compare the costs in detail and also establish if the funds available within Prudential meet your requirements (i.e. more choice may not necessarily be an advantage for you), as well as determining whether the old one has any safeguarded benefits (that may hinder or even effectively prevent a transfer) or if its access provisions (age, etc) are suitable for you.

underwhelmed_saver

For me I've moved all of my previous defined-contribution pensions into a SIPP.

I also contribute monthly to the SIPP alongside my workplace pension, which I contribute enough for the max employer contribution  (me 2%, employer 5%)

I would contribute more to the workplace one, but they don't offer salary sacrifice so the contributions get taken out after tax. I find it easier to just top up my SIPP instead with a regular monthly amount.

dunstonh

As I'm in a situation where I have a current workplace pension and also an older pension from previous jobs with another provider, does it make sense to move the old one to a SIPP? The old one is with Prudential.

Is that with one of the Pru pensions that are absolute gems and better than those you can buy today or one of the obsolete plans that are not very good or middle of the road offering?

And in respect of the SIPP you "may" buy in its place, would that be one of the good SIPPs or not so good SIPPs?

The problem with generalisations is that they are just as likely to be wrong as right.    

isayhello

underwhelmed_saver said:

For me I've moved all of my previous defined-contribution pensions into a SIPP.

I also contribute monthly to the SIPP alongside my workplace pension, which I contribute enough for the max employer contribution  (me 2%, employer 5%)

I would contribute more to the workplace one, but they don't offer salary sacrifice so the contributions get taken out after tax. I find it easier to just top up my SIPP instead with a regular monthly amount.

So with your SIPP when you're adding money to it, as I understand it the SIPP provider should be topping this up with 20% tax relief correct? so for every £8 you add, it's actually adding £10? Have I got that right?

What is the deal if you're a higher rate earner, is it a hassle to try and claim the extra relief?

isayhello

dunstonh said:

Is that with one of the Pru pensions that are absolute gems and better than those you can buy today or one of the obsolete plans that are not very good or middle of the road offering?

And in respect of the SIPP you "may" buy in its place, would that be one of the good SIPPs or not so good SIPPs?

The problem with generalisations is that they are just as likely to be wrong as right.    

I don't know enough about pensions to know if it's a gem or not, it seems to be a standard one I had through work many years ago and I've just changed the funds I invested in and haven't touched it in years.

When I came across the monevator recommendation to have a SIPP as well, I wondered about whether to transfer and if SIPP's would offer me anything I'm missing from my workplace pensions.

granta

isayhello said:

I don't know enough about pensions to know if it's a gem or not, it seems to be a standard one I had through work many years ago and I've just changed the funds I invested in and haven't touched it in years.

When I came across the monevator recommendation to have a SIPP as well, I wondered about whether to transfer and if SIPP's would offer me anything I'm missing from my workplace pensions.

Do you know what the charges are for your older pensions?
I know charges are not the only factor but it was the starting point for me in evaluating whether to stick with the older pensions where the fees now seemed excessive compared to more recent pensions and the SIPP I opened.