PUTTING AN ISA INTO A SIPP

pg1947

I would appreciate guidance as to whether or not it is feasible for me to use this years forthcoming ISA allowance to purchase an ISA through my SIPP cash fund, what the pros and cons are and how best to locate suitable ISA providers.
Many thanks
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Mark_d

An ISA is a tax free wrapper around a savings/investment account.  A SIPP is a different vehicle entirely.

Are you asking about taking money out of your pension account to contribute to an ISA?

pg1947

Thanks Mark. My SIPP ,currently with A J Bell invests in fixed rate bonds only and as one matures later this year I wanted to use some of the proceeds to purchase an ISA and hold it in the SIPP. The intention was to safeguard the interest from tax.

Albermarle

AFAIK, you can not even hold fixed rate savings bonds in a normal AJ Bell SIPP.

Unless it is maybe a Full SIPP ?

In any case any returns generated in a SIPP are tax free, so what use would an ISA be ?

I think you need to supply more detail.

Gary1984

You can't hold an ISA in a SIPP. They are both different types of tax wrapper with their own rules and limits around contributions and withdrawals etc. However generally speaking any asset you can hold in an ISA (cash, bonds, shares, funds etc) you can also hold in a SIPP.

Are you just looking to hold the bond proceeds as Cash? The best way to do this may be a cash ISA. 

SVaz

You can use a Short term money market fund within a Sipp which will usually give better interest than keeping it in cash. 

If you don’t need the money for at least a decade then a collapsing gilt ladder might pay better. 

saajan_12

pg1947 said:

Thanks Mark. My SIPP ,currently with A J Bell invests in fixed rate bonds only and as one matures later this year I wanted to use some of the proceeds to purchase an ISA and hold it in the SIPP. The intention was to safeguard the interest from tax.

The growth and interest of anything in a SIPP is free from tax anyway, so there's no benefit in an ISA for the same funds. Hence why an ISA in a SIPP just isn't a 'thing'. 

What do you mean by 'purchase an ISA' as it sounds like theres some confusion here? An ISA is a tax wrapper, in which you can place cash / bonds / stocks etc. You can also invest in cash / bonds / stocks in a GIA (general investment account) or in a SIPP. Basically investments don't have to be in ISAs. 

SVaz

Is there a reason why Sipp providers can’t/ don’t offer a fixed rate / fixed term product?
I’m sure there would be lots of takers.

incus432

SVaz said:

Is there a reason why Sipp providers can’t/ don’t offer a fixed rate / fixed term product?
I’m sure there would be lots of takers.

Gilts meet that need. Choose your term and hold to maturity

dunstonh

SVaz said:

Is there a reason why Sipp providers can’t/ don’t offer a fixed rate / fixed term product?
I’m sure there would be lots of takers.

Cost.   Full SIPPs or Fund supermarket style SIPPs tend to offer them.    Budget SIPPs tend not to.

Albermarle

SVaz said:

Is there a reason why Sipp providers can’t/ don’t offer a fixed rate / fixed term product?
I’m sure there would be lots of takers.

Most of the well known SIPP providers are investment platforms, offering SIPP's ISA's , GIAs, shared dealing etc .

Fixed rate/term providers are essentially banks, where they use your money to lend out to other people. So a different business model.