Should I consolidate/split my SIPPS into a single provider?

edited 1 February at 2:31PM in Pensions, annuities & retirement planning
2 replies 111 views
planforfutureplanforfuture Forumite
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My wife has a SIPP with a well known provider worths of £200k. Everywhere we read, the advice is to consolidate all SIPPS into a single provider for easier management and potential costs savings. However,  nobody has mentioned there could be a disadvantage if the SIPP provider goes default then FSCS maximum protection is £85k. In my wife's case with a single provider,  she may not able to fully recover her full pension value of £200k.

Please advice if my understanding is correct. Thanks in advance for your help. Should she split up her single provider SIPP to multiple providers instead e.g. in 80k, 80k and 40k etc.


  • AlbermarleAlbermarle Forumite
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    This question is asked regularly.
    If a 'well known SIPP provider' was to have financial problems, it does not directly affect the investments in the SIPP where your money is. If it did happen, then you would just have difficulty accessing funds for a while, whilst it was sorted out. The £85K is there more in case of fraud, chronic administration problems, that meant you money went missing somehow.
    The consensus of most on this forum, is that if you are with mainstream provider, the chance of any of the above happening is approx. zero and many people hold many hundreds of thousands of Pounds ( even Millions) with one provider.
    It seems though that many with large holdings do tend to have at least two providers. Partly in case of an IT meltdown at one of them . Other reasons can be keeping an old workplace pension going as fees are very low, and a more modern SIPP as the investment choice is better. 
    There can be a small penalty in charges for having more than one provider, but with some research this can be minimised.
    If she is happy with the current provider, and the charges are competitive, I would not bother splitting it up into £85K sized chunks . However for cash savings, I would.
  • planforfutureplanforfuture Forumite
    86 Posts
    Tenth Anniversary 10 Posts Name Dropper Combo Breaker
    Thanks for the advice.  Much appreciated. 
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