advice on regular payments into a SIPP please

MallyGirl

We really can't advise you but, in my unqualified opinion, you could probably see HSBC Global Strategy Balanced as similar to LS60 and HSBC Global Strategy Dynamic as being similar to LS80. The HSBC ones are a bit less UK heavy.

Lowtrawler

On ii, if you split your purchase into 2 - both below £100k, you will pay 2 x £3.99 in dealing (one of those might be free because you get 1 x £3.99 trade free each month). If you make 1 purchase of over £100k, you will pay a dealing fee of £40. Just a way to save yourself over £30 in dealing costs.

sadexpunk

Lowtrawler said:

On ii, if you split your purchase into 2 - both below £100k, you will pay 2 x £3.99 in dealing (one of those might be free because you get 1 x £3.99 trade free each month). If you make 1 purchase of over £100k, you will pay a dealing fee of £40. Just a way to save yourself over £30 in dealing costs.

oh my, i think im getting more and more confused now  

i recently sent a secure message to ii explaining my confusion over their plans, and what my charges might likely be.  this was the response.....

"Thank you for your kind words and for getting back to us. I'm glad to clarify any confusion regarding the trading options available to you under the Pension Builder Plan.

As you currently hold over £75,000 in hour SIPP account, you are not eligible for the Pension Essentials plan but do qualify for the Pension Builder plan. I’m sorry if I confused you previously.

The distinction between the free trade each month and the free regular investing service might seem a bit confusing at first glance, so let me explain further. Under the Pension Builder Plan, while you do not automatically receive a free trading credit each month for ad-hoc trades, our free regular investing service allows you to make monthly investments into your chosen fund without incurring a trading fee. This means that if you set up a Direct Debit to invest a fixed amount into the Vanguard Life Strategy fund each month, these transactions would not incur the usual trading costs.

To select free regular investing, you would just need to log into your ii account, select ‘Portfolio’ and then ‘Free regular Investing’. Here it will allow you to ‘Edit Investments’ and here you can add up around 25 different stocks, but each one would need to be a minimum trade of £25. You would then save changes, and your regular investment type is now set up. Now you would just need to click on ‘Cash’ then Direct Debit, and it will allow you to ‘set up Direct Debit’ and will guide you through doing this.

We're here to help, and we appreciate the opportunity to assist you in making the most of your pension investments."

i was also given this info which seems to agree with this......

"You get free trades every month in as many funds as you choose. So you just set up what you want to invest in regularly, add extra investments when you have any cash balances from tax relief and then unless you opt to do extra trades outside of the free investment day (9th of the month), all of your trades are free.
Edit just checked – free regular investing is for up to 25 trades per month. You can go into the regular investing bit whenever you like and adjust how much of your monthly investment you want to go into each of the funds / ETFs you have decided upon."

the ii message was when i was thinking of investing in lifestrategy.  following general advice on here i think ive changed my mind due to the heavy uk weighting, so ill invest in something more global, maybe 3 different funds, recommended to me on a separate thread i started around opening a JISA for my grandaughter.  "VG Global All Cap, VG Developed World ex-UK Equity, or Fidelity Index World."

whichever i plump for, im of the understanding that i can invest in up to 25 different funds free per month with that 'free regular investing' that ii mentioned, of which ill only use 3.

have i totally misunderstood the advice given to me?

TLDR:  say i want to invest 135k into 3 different funds (moneys in there waiting to be invested), then add another 10k a week or so later, then invest £100 monthly into these three funds, whats my best strategy?

thank you very much for taking to time to help me, i really appreciate it.

bjorn_toby_wilde

sadexpunk said:

Lowtrawler said:

On ii, if you split your purchase into 2 - both below £100k, you will pay 2 x £3.99 in dealing (one of those might be free because you get 1 x £3.99 trade free each month). If you make 1 purchase of over £100k, you will pay a dealing fee of £40. Just a way to save yourself over £30 in dealing costs.

oh my, i think im getting more and more confused now  

i recently sent a secure message to ii explaining my confusion over their plans, and what my charges might likely be.  this was the response.....

"Thank you for your kind words and for getting back to us. I'm glad to clarify any confusion regarding the trading options available to you under the Pension Builder Plan.

As you currently hold over £75,000 in hour SIPP account, you are not eligible for the Pension Essentials plan but do qualify for the Pension Builder plan. I’m sorry if I confused you previously.

The distinction between the free trade each month and the free regular investing service might seem a bit confusing at first glance, so let me explain further. Under the Pension Builder Plan, while you do not automatically receive a free trading credit each month for ad-hoc trades, our free regular investing service allows you to make monthly investments into your chosen fund without incurring a trading fee. This means that if you set up a Direct Debit to invest a fixed amount into the Vanguard Life Strategy fund each month, these transactions would not incur the usual trading costs.

To select free regular investing, you would just need to log into your ii account, select ‘Portfolio’ and then ‘Free regular Investing’. Here it will allow you to ‘Edit Investments’ and here you can add up around 25 different stocks, but each one would need to be a minimum trade of £25. You would then save changes, and your regular investment type is now set up. Now you would just need to click on ‘Cash’ then Direct Debit, and it will allow you to ‘set up Direct Debit’ and will guide you through doing this.

We're here to help, and we appreciate the opportunity to assist you in making the most of your pension investments."

i was also given this info which seems to agree with this......

"You get free trades every month in as many funds as you choose. So you just set up what you want to invest in regularly, add extra investments when you have any cash balances from tax relief and then unless you opt to do extra trades outside of the free investment day (9th of the month), all of your trades are free.
Edit just checked – free regular investing is for up to 25 trades per month. You can go into the regular investing bit whenever you like and adjust how much of your monthly investment you want to go into each of the funds / ETFs you have decided upon."

the ii message was when i was thinking of investing in lifestrategy.  following general advice on here i think ive changed my mind due to the heavy uk weighting, so ill invest in something more global, maybe 3 different funds, recommended to me on a separate thread i started around opening a JISA for my grandaughter.  "VG Global All Cap, VG Developed World ex-UK Equity, or Fidelity Index World."

whichever i plump for, im of the understanding that i can invest in up to 25 different funds free per month with that 'free regular investing' that ii mentioned, of which ill only use 3.

have i totally misunderstood the advice given to me?

TLDR:  say i want to invest 135k into 3 different funds (moneys in there waiting to be invested), then add another 10k a week or so later, then invest £100 monthly into these three funds, whats my best strategy?

thank you very much for taking to time to help me, i really appreciate it.

I think those three funds are 100% equity (sure somebody will correct me if not).  Your earlier choice of VG80 is 80% equity. Just so you’re aware.

sadexpunk

yeah im pretty happy with that tbh, my 6 previous funds were probably 100% equity too, im happy enough to take the extra risk i think.  i'd half considered changing to LS100 anyway.....

thank you

WindfallWendy

Marcon said:

sadexpunk said:

3. its set up to auto pay these fees by selling a few shares each time.  i obviously dont decide which ones and i wouldnt know anyway, i just assume they choose one in my best interests?  or should i set up something to pay these fees straight from my bank?

No. If they are paid from the SIPP, they are being paid out of money you've contributed and on which you've had tax relief, so effectively 'cheaper' that way.

Really? Right. OK. So just to check.... I have a Vanguard S&S ISA and have recently opted to pay management fees from my bank account rather than from my ISA. Because I figured paying fees from my S&S ISA reduces the reinvestment of tax-free interest/earnings.

Am I being silly and should I pay it from my Vanguard account instead? 

WindfallWendy

Sorry - I've just realised that I have boinged this thread up from October! 
Would be interested to know @sadexpunk how the SIPP is going?

I have been wondering about early retirement and a pension pot but figure I might as well pay into my employee pension rather than get my own separate private one, as the tax relief at source seems easier than writing to HMRC each year asking for it back (or am I wrong on that front and HMRC would be paying it directly into a personal pension for you? Is that what happens???).

And just to understand your situation @sadexpunk - you put £80k in 7 years ago, and now plan to put £100/month in (£125 with tax relief added) for the next 5 years.... and that will keep you going for 5 years? Or 3 years? Or until such time as other pensions become available to you?

THANK YOU for your patience as I too get my head around all the finance malarkys and jiggerie pokerie

QrizB

WindfallWendy said:

Am I being silly and should I pay it from my Vanguard account instead? 

£1 of fees paid from your bank account costs you £1 of net-of-tax income.

£1 of fees paid from your Vanguard SIPP costs you 80p of net-of-tax income.

WindfallWendy said:

... I figured paying fees from my S&S ISA reduces the reinvestment of tax-free interest/earnings.

ISAs don't get tax relief in the same way that SIPPs do, so it makes little difference.

MallyGirl

WindfallWendy said:

Marcon said:

sadexpunk said:

3. its set up to auto pay these fees by selling a few shares each time.  i obviously dont decide which ones and i wouldnt know anyway, i just assume they choose one in my best interests?  or should i set up something to pay these fees straight from my bank?

No. If they are paid from the SIPP, they are being paid out of money you've contributed and on which you've had tax relief, so effectively 'cheaper' that way.

Really? Right. OK. So just to check.... I have a Vanguard S&S ISA and have recently opted to pay management fees from my bank account rather than from my ISA. Because I figured paying fees from my S&S ISA reduces the reinvestment of tax-free interest/earnings.

Am I being silly and should I pay it from my Vanguard account instead? 

The response is to using SIPP funds (which have been boosted by tax relief) to pay for fees. You are asking about an ISA which did not gain tax relief on the way in.

sadexpunk

WindfallWendy said:

Sorry - I've just realised that I have boinged this thread up from October! 
Would be interested to know @sadexpunk how the SIPP is going?


And just to understand your situation @sadexpunk - you put £80k in 7 years ago, and now plan to put £100/month in (£125 with tax relief added) for the next 5 years.... and that will keep you going for 5 years? Or 3 years? Or until such time as other pensions become available to you?

THANK YOU for your patience as I too get my head around all the finance malarkys and jiggerie pokerie

its been a slow old process @WindfallWendy but im nearly there.  interactive investor sent me a couple of confusing messages which stalled things for a while but theyve been pretty good of late.

yes i put around 80k into a HL SIPP 7 years ago, investing in 6 funds.  5 did well, 1 lost money, the SIPP is now worth 135k and ive cashed in the 6 funds, moved it to II for the lower fees and am considering which funds to invest in now.  initially i thought just one fund to keep it simple, but then i read this link sent to me on another thread https://monevator.com/best-global-tracker-funds/ which recommended diversifying larger sums of money, so im currently looking into which funds to invest in.  i hope to have chosen these in the next day or so.

ive got around 10-12k to add to it once up and running, and then yes i intend to chuck £100 into it per month.  just working out the cheapest way of doing this, and whether i can set up some instructions with II that they will invest this £100 either in a different fund each month, or £25 into each of 4 funds per month say, and whether there are any costs involved in this.

and yes again, this is for the next 5 years.  im 60 now and will be able to start taking 2 pensions at 65, so im resigned to working until then sadly.  if i want 2 greek holidays per year then ive no choice :-)