Small pension for wife - SIPP or Stakeholder?

thecornflake

Hi, 

We are looking at options for my wife to start a small pension for herself. She has no current income other than regular transfers from myself to cover odd bits although may find a small part time job in the future. I manage my own pension investments in work pensions and would say I'm fairly confident in understanding the investment side - we would probably look at a very simple passive funds as the main point is just to get something in place for now. We want the flexibility to adjust payments and not have to pay in every month and its going to be started with a fairly small lump sum (say 300).
I cant really see much difference between sipps and stakeholders given that we dont need a massive amount of choice for the investments so is it just down to ones with the lowest management costs? 

gm0

Basically yes.  Stakeholders are less actively promoted of late.

Major:

Platform domicile and registration i.e. UK protection for UK investor.
Current cost to hold and operate (your pot size, your level and frequency of trading to add funds and any trade fees)
Business size and sustainability suit you views on risk of doing business with them to this value.

Minor:

Customer service reputation
Digital channels - web, app etc.
Investing guidance and fund analysis/marketing services as may be offered.
Family discounts (for consolidating more than one family member on the service)

Fund fees will be largely a wash for all the majors - something passive tracker equivalent at 0.06 - 0.12 fund management costs will be available. HSBC, Vanguard, iShares etc.

So it will be platform fee and sensibly (low) trade fees to suit your take on "top ups" and rebalancing (if even relevant)
If only doing a once a year top up trade then the trade fees will be a lot less relevant than for an active trader or a monthly contributor.

I shortlisted iWeb, Fidelity UK, Vanguard UK, AJ Bell and went to their websites and forum and Monevator/other web comparisons to dig into it a bit more as to cost/service/reputation and any gotchas.  But if you hunt hard enough you will find hard cases and horror stories on service, pension transfer delays, marketing misadventures around the Woodford scandal) which could put you off any one of these outfits for one reason or another.

dunstonh

I cant really see much difference between sipps and stakeholders given that we dont need a massive amount of choice for the investments so is it just down to ones with the lowest management costs? 

Stakeholder pensions are a 2001 product and they show their age.  There are only three providers left (possibly a 4th but they don't actively market it).    It's a niche option nowadays.

Robo providers have largely replaced them for individual choice.   Along with personal pensions (although these are in decline too).

SIPPs are the main option nowadays for individual plans and can be cheaper (or more expensive) than robos and stakeholders.

Albermarle

For lower amounts you are better with a provider that charges a % of the funds as a platform fee. Once sums get bigger it can pay to move to a flat fee provider.
If you are happy with investing you can ignore the robo advisors as they are more expensive. I would look at Vanguard; Fidelity and AJ Bell .