SIPP

MiserlyMartin

masonic said:

crisis_management said:

I was thinking of Freetrade,  but I would have to move the fund when drawing down,  as they don't seem to support that.

Compare for example with Fidelity where you have an ongoing fee of 0.35% per year capped at £3.75 per month (providing you will only hold ETFs, ITs and shares) with a £1.50 trading fee as part of a regular savings plan. Unless you intend to make lots of very small purchases, the Freetrade £9.99 per month subscription fee is going to outweigh the benefits of commission free trading. It is good to get into the habit of being an infrequent trader. As you've identified, you'll need to move to a more mainstream platform eventually, I'd suggest you might want to do so as your SIPP grows in value, and at a mainstream platform there will be a cost per trade.

The Freetrade pricing has changed. ISA's (standard) are now £4.99 a month and on the plus £9.99 - the SIPP is now thrown in for free on plus. This changes the game. Before it was another £10 a month. They pay 3% interest on up to £4000 of uninvested cash in there on plus, which kind of pays the 9.99 a month sub. I trade a lot. I was thinking of moving all my pensions away from big platforms - Aviva, Royal London etc - into the Freetrade SIPP. According to trustnet I have outperformed my standard company pension pots. I think it must be because I'm looking at ETF prices everyday and buying in when low, carrying out stop the odd loss and limit sells (which doesn't always make me money). So in theory if I have my pension in there I can manage that along the same lines. Even VWRL has outperformed my old company pensions which were in bonds and emerging markets !))

But this is the but.... some have suggested not to put more than 85k in Freetrade. My pensions way more than that. If I add on the ISAs I was also going to move in, thats even more. Is this a good idea? I mean don't you only get 85K protection with Fidelity?

masonic

MiserlyMartin said:

masonic said:

crisis_management said:

I was thinking of Freetrade,  but I would have to move the fund when drawing down,  as they don't seem to support that.

Compare for example with Fidelity where you have an ongoing fee of 0.35% per year capped at £3.75 per month (providing you will only hold ETFs, ITs and shares) with a £1.50 trading fee as part of a regular savings plan. Unless you intend to make lots of very small purchases, the Freetrade £9.99 per month subscription fee is going to outweigh the benefits of commission free trading. It is good to get into the habit of being an infrequent trader. As you've identified, you'll need to move to a more mainstream platform eventually, I'd suggest you might want to do so as your SIPP grows in value, and at a mainstream platform there will be a cost per trade.

The Freetrade pricing has changed. ISA's (standard) are now £4.99 a month and on the plus £9.99 - the SIPP is now thrown in for free on plus. This changes the game. Before it was another £10 a month. They pay 3% interest on up to £4000 of uninvested cash in there on plus, which kind of pays the 9.99 a month sub. I trade a lot. I was thinking of moving all my pensions away from big platforms - Aviva, Royal London etc - into the Freetrade SIPP. According to trustnet I have outperformed my standard company pension pots. I think it must be because I'm looking at ETF prices everyday and buying in when low, carrying out stop the odd loss and limit sells (which doesn't always make me money). So in theory if I have my pension in there I can manage that along the same lines. Even VWRL has outperformed my old company pensions which were in bonds and emerging markets !))

But this is the but.... some have suggested not to put more than 85k in Freetrade. My pensions way more than that. If I add on the ISAs I was also going to move in, thats even more. Is this a good idea? I mean don't you only get 85K protection with Fidelity?

Yes, that change in pricing will make Freetrade a lot more attractive to those who trade a lot.

The risk with exceeding the FSCS compensation limit is related to administration costs and losses due to fraud or an imbalance in the client accounts. The assets are ringfenced and not at risk themselves, but the cost of the administration must be picked up by the clients, with the FSCS stepping in to cover this as part of the £85k limit. Beyond that, the risk is that the administrators find that some assets are missing, and this loss would be shared between all of the owners of the asset in question. If you stick to the largest, established names, and popular holdings, then this risk is minimised. Personally, I would be reluctant to hold a high six figure sum with a challenger firm, but it does not pose anywhere near the risk of breaching the FSCS limit in cash at one of the many obscure savings banks.

MiserlyMartin

Thanks, it's six figure but not high - if I transferred in all my pensions it would be only about £160k. S&S ISAs, will be around 20K max. Yes most of it will be in ishares or vanguard funds/etf's. Safe enough>?

masonic

MiserlyMartin said:

Thanks, it's six figure but not high - if I transferred in all my pensions it would be only about £160k. S&S ISAs, will be around 20K max. Yes most of it will be in ishares or vanguard funds/etf's. Safe enough>?

Yes, it would be pretty unlikely for them to fail and "lose" a large proportion of those popular ETFs to tip you over the £85k.