Split SIPP across multiple banking groups

RemotecUK

I was reading the FSCS compensation arrangements for pensions which can be found here:

https://www.fscs.org.uk/what-we-cover/pensions/

Specifically this part:

• but if your pension provider was a SIPP operator 
  we can pay up to £85,000 per eligible person, per firm 

I was wondering how people manage their SIPPs if the value is greater than £85,000. Do you split across multiple providers?

Also, what will happen if the SIPP grows past £85,000 -  is it best to "top slice" it into another provider?

Thanks in advance.

penners324

The chances of a pension fund going under are absolutely miniscule. 

Or lump for a HSBC fund.

If HSBC is allowed to go bust the world economy would go into a very steep and deep tail spin 

dunstonh

I was wondering how people manage their SIPPs if the value is greater than £85,000. Do you split across multiple providers?

Don't care.  Its so irrelevant that its not worth worrying about. 
However, I only use mainstream platforms that are profitable and have low illiquid assets (so no contagion from other people) and only use easily tradeable investments (avoid funds with low AUMs and have good liquidity).

Even the platform fails and you have used mainstream tradeable liquid funds, then you are not really at risk.

Based on precedent, with platform failures where the FSCS is involved, the FSCS compensation goes towards the cost of the administrators who is tasked with either finding a buyer or winding it down.   A platform that has low illiquid assets will be in high demand and sold as a going concern.   A platform with high illiquid assets wont get any interest.   However, there is a company set up to take on bad platforms.

Do not mistake FSCS protection on investments to be the same in risks covered or the issues involved.   They are different.      Personal pensions get 100% FSCS protection with no upper limit because of the extremely low risk.  SIPPs don't get that because people can use unregulated or weird assets.  However, if people couldn't and didn't use those unregulated or weird assets, it would be likely that FSCS protection would be the same as personal pensions.   

So, the key is not to go away from mainstream, do not use small niche unprofitable players and stick to liquid tradeable regulated investments.