HL SIPP Fees Cash Question

mebu60

Recently opened an HL SIPP depositing £2880 and this week received the £720 tax credit. Also paid the very modest £1.25 fees to date by debit card.

There is a recommended £5 minimum cash balance to be held for fees. However, the only way I could see to add cash was to the SIPP itself which would take me over my permitted maximum £2880 and presumably also trigger further tax relief on that.

Am I missing something obvious?

The two funds in the SIPP are Acc so will not generate surplus cash. And I would prefer to pay fees outside the SIPP anyway. How do others do this? 

With Fidelity I have a S&S ISA and a separate cash management account which I add to periodically and the ISA fees are taken out of that first. 

ColdIron

For the Drawdown SIPP there is an option to 'Collect fees outside account where possible' (i.e. the Fund and Share account). I presume this is also available in the SIPP. See Fees and minimum cash balance under Account settings

If there isn't enough cash they will sell units

Section62

mebu60 said:

The two funds in the SIPP are Acc so will not generate surplus cash. And I would prefer to pay fees outside the SIPP anyway. How do others do this? 

I pay mine from a Fund and Share account - i.e. as ColdIron suggests, and it does work for the SIPP.  Likewise my ISA fees come from the F&S account.

Mainly for the purpose of qualifying for a current account benefit I've set up a direct debit to fund the F&S account (min £25) monthly so I don't risk running out of cash on account and have any investments sold as a result.

ColdIron

I pay the ISA fees from the F&S account to maximise my ISA holdings but not for the SIPP. There is a small advantage to be had by paying the fees from cash that has received a tax rebate

mebu60

Thanks both @ColdIron and @Section62

Have been back on HL. I only have a SIPP account. There is no advertised option to collect fees from outside the account. I have messaged them pointing out I cannot add cash for this purpose to my SIPP as I am at my maximum contribution but it is the only option they offer me. I have asked in the absence of a cash management account how I can hold cash for the purpose of paying future SIPP fees. Given your comments I expect the answer will be to have an F&S account. I have also mentioned in my message that there is no mention that I can see that any F&S cash will be prioritised for SIPP fees. Once I have their answer I will give feedback that it would be helpful if they made this more obvious!

Thanks again, insights much appreciated.

ColdIron

Just go into Account Settings - Fees and minimum cash balance - Edit

You can use the F&S account as a cash management account

Edit: You might need to open a F&S account, I thought they opened one automatically. It's free. There is no other way I know of

mebu60

@ColdIron

I came across that page but I do not get offered the fourth option nor the F&S option:

ColdIron

Have you got a F&S account? @Section62 confirmed it works in their post above

ChesterDog

HL will sell sufficient units of one of your investments, when they feel they need to recoup any fees due.

Or you could do so yourself.

We are currently moving our sipps from HL to iWeb, but have generally left sufficient cash uninvested within the sipps to cover a year's worth of fees.

Or... you could add cash to the account, as long as you tell HL not to claim tax relief on it.

mebu60

ColdIron said:

Have you got a F&S account? @Section62 confirmed it works in their post above

No. Though given @Section62 observation I am expecting HL will suggest that. @ChesterDog final observation interesting too. 

Whichever route I end up going, the point is that HL need to provide the relevant information and direction. Most SIPP only customers won't have access to you guys' insights.

Thanks again all. 

NedS

It's easy enough to pay HL fees from outside of a SIPP account if that is your desire - just go to the Account Administration tab and select Pay fees online using a debit card