what pension? sipp or not?

andrewf75

Hi all,
I'm 49 and as well as my current work pension (already getting max employer contribution) I want to start another one. I have an old workplace Scottish widows pension (approx 150k) which has 0.8% approx in fees, which I believe is quite high compared to newer products. Current plan is to open a new pension and transfer that one in and then make monthly payments to grow my pot. 

I'm trying to research SIPPS, but the definition seems to be a bit fluid these days. I don't want to be entirely self-managing. All I want is something with low fees, where I can make a few broad choices and then leave it. Does anyone have a recommendation? Have looked at AJBell which seems to have some good options. I like the sound of the II SIPP with monthly flat fees but concerned its too hands-on in terms of managing the funds.

Many thanks :-)

Dazed_and_C0nfused

andrewf75 said:

Hi all,
I'm 49 and as well as my current work pension (already getting max employer contribution) I want to start another one. I have an old workplace Scottish widows pension (approx 150k) which has 0.8% approx in fees, which I believe is quite high compared to newer products. Current plan is to open a new pension and transfer that one in and then make monthly payments to grow my pot. 

I'm trying to research SIPPS, but the definition seems to be a bit fluid these days. I don't want to be entirely self-managing. All I want is something with low fees, where I can make a few broad choices and then leave it. Does anyone have a recommendation? Have looked at AJBell which seems to have some good options. I like the sound of the II SIPP with monthly flat fees but concerned its too hands-on in terms of managing the funds.

Many thanks :-)

If you are doing that what is there to manage, on anything more than an irregular basis?

Mark_d

I have transferred my previous DC workplace pensions into my current DC workplace pension.  It's simple to manage as I only need to consider the one DC pension.  I believe the employer pays some fees, so maybe it works out cheaper than a SIPP

andrewf75

Another option I suppose, charges on that are lower at 0.6%

dunstonh

I'm trying to research SIPPS, but the definition seems to be a bit fluid these days. I don't want to be entirely self-managing. All I want is something with low fees, where I can make a few broad choices and then leave it. Does anyone have a recommendation? Have looked at AJBell which seems to have some good options. I like the sound of the II SIPP with monthly flat fees but concerned its too hands-on in terms of managing the funds.

A proper SIPP will have whole of market investment options.    So, all proper SIPPs will have the same 30,000 odd range of investments (plus perhaps a handful that a specific to that SIPP if they happen to be a fund house as well).

Just because there are 30,000 or so investments, doesn't mean you need 30,000.     If you have identified a fund then it will be on all the whole of market platforms.  

If you are using multiple funds, then you should not invest and leave it.   You will need to rebalance periodically to bring it back in line with the strategy you are following.    If you planned to select a bit of random hit and hope then don't.   That is a recipe for lower returns most of the time.    

andrewf75

So I guess one of my questions is whether its worth having a SIPP (for the low charges) and then just picking a basic one or two funds? I'm happy to rebalance now and again, but realistically I'm not someone who will want to keep looking at it. 

LHW99

There are still some stakeholder personal pensions out there, which are old fashioned but generally simpler than SIPPs.

Otherwise why not add to your work pension, and leave the old one alone for now. Most work pensions seem to allow you to increase your contributions (even if it doesn't get extra from your employer).

af1963

At 49, you have at least 8 years before drawing this, almost 20 years if you don;t need it till retirement age, and it could be potentially 40 or 50 years until you stop accessing it. Depending on when you will use this chunk of pension, you could leave it in a diversified global fund for quite a long time before needing to think about whether you need to change how it's invested.   ( And if it's part of a wider set of investments, other pensions etc, you may be able to 'rebalance' by changing the balance within the other investments.)

Sarahspangles

andrewf75 said:

So I guess one of my questions is whether its worth having a SIPP (for the low charges) and then just picking a basic one or two funds? I'm happy to rebalance now and again, but realistically I'm not someone who will want to keep looking at it. 

I had a small dormant DC pension pot from a former job, invested in the default ‘safe’ fund. I decided I was happy with a bit more risk and rather than change the mix of funds in the dormant pension I moved it all to a SIPP. I do track how the previous fund performs relative to my slightly more adventurous SIPP fund choices, and it currently looks like a trendline - sometimes the more volatile funds dip below it but I’m fine with this, and mostly I’m ahead.

However what I now realise is that what makes more difference to the value of my SIPP is that I’m paying into it! The app sits in a folder with my budgets and banking apps and when I have some money that is not earmarked I typically spend a bit and then sweep the rest into my SIPP. It’s easy to pay in, I invest in one of my existing funds within a day or two and get the tax relief and hopefully some growth. It feels more like a investment account than a pension arrangement. 

Albermarle

andrewf75 said:

So I guess one of my questions is whether it’s worth having a SIPP (for the low charges) and then just picking a basic one or two funds? I'm happy to rebalance now and again, but realistically I'm not someone who will want to keep looking at it. 

Sips have  a variety of charging structures, and the investment funds you buy to hold in the SIPP will also have a variety of fees  
You can not assume a SIPP will be cheaper, until you know for sure what you are going with.
0.6% all in for your current works pension isis reasonable enough, although you could probably reduce that in a SIPP with some careful research.