First time SIPP user where to start, is it worth it & should I pay for advice

Jojo77_2

Im new to the idea of a SIPP & z bit unsure where to start.
My employment has changed I need to decided between being auto enrolled in to Nest, or opening a SIPP with standard life via my new "employer"(umbrella company) or going to an IFA & paying for advice & getting a SIPP via them (if they can find a salary sacrifice one. 
I'm having a review with my building society on Monday but thats just "restricted advice" 
The umbrella company offer a standard life SIPP. 
I don't think nest is the right option as I want to contribute c£2000 a month and I'm restricted to much less with nest. 
I'm happy to give a Sipp a try but nervous re chosing my own funds. 
I will probably be only contributing for about 2 years at this take before I go part/ time or take a break. I'm 47 & have a small DB final scheme paying about £5 a year at 57. And a DC pot in a former workplace pension of around £140k. I have some savings, no mortgage & am married with my husbands income covering all bills & basic outgoings. After the £2k pension contributions ill still have a decent disposable income to top up my savings each month etc. 
Do Sipps have funds that ate low risk / passive etc. 
How easy us it to manage myself ? 

Linton

Salary sacrifice is a facility that the employer may provide to handle employee contributions.  It makes no difference to the pension provider - if they can support employer contributions they can support salary sacrifice.

Most employers only support salary sacrifice into the employer's pension scheme rather than the employees preferred SIPP.  Managing a large number of employees all with diffierent pension schemes is a complication that most employers wont want to take on.  So you will need to check what your umbrella company supports.

Most mainstream SIPPs will support any fund generally available. This includes good and bad, high risk and low risk, active and passive etc etc.  There are 1000s of options.  The choice is yoiurs so you need some knowledge to avoid making a poor choice.

The problem in using an IFA is that it's only worthwhile for both the customer and the IFA if the money involved is significant say >£100K.  

Marcon

Jojo77_2 said:

Im new to the idea of a SIPP & z bit unsure where to start.
My employment has changed I need to decided between being auto enrolled in to Nest, or opening a SIPP with standard life via my new "employer"(umbrella company) or going to an IFA & paying for advice & getting a SIPP via them (if they can find a salary sacrifice one. 
I'm having a review with my building society on Monday but thats just "restricted advice" 
The umbrella company offer a standard life SIPP. 
I don't think nest is the right option as I want to contribute c£2000 a month and I'm restricted to much less with nest. 
I'm happy to give a Sipp a try but nervous re chosing my own funds. 
I will probably be only contributing for about 2 years at this take before I go part/ time or take a break. I'm 47 & have a small DB final scheme paying about £5 a year at 57. And a DC pot in a former workplace pension of around £140k. I have some savings, no mortgage & am married with my husbands income covering all bills & basic outgoings. After the £2k pension contributions ill still have a decent disposable income to top up my savings each month etc. 
Do Sipps have funds that ate low risk / passive etc. 
How easy us it to manage myself ? 

There's no restriction on what you can contribute to NEST. I wonder what's making you think there is?

Could you add to this former pension? Many workplace pensions are a personal pension of some description so worth checking if that's an option.

If you don't want to choose your own funds, a non-SIPP personal pension or a stakeholder pension would offer a default fund which you could use while you learn more about the topic (assuming you want to!) and you could then switch funds within that pension scheme at a later date.

Helpful reading: https://www.moneyhelper.org.uk/en/pensions-and-retirement

Pipthecat

Speak to you umbrella company about which platforms support Salary Sacrifice.  Paystream for example works with Aviva, Fidelity, Hargreaves Lansdown, Interactive Investor and a bunch of others.

The choice of funds is difficult because there is so much to choose from. I can't say whether you would benefit from advice, but if you choose to do it yourself there are simpler options you can pick from such as a whole world fund if you are feeling adventurous or a lifestyle fund which is made up of a stock bond mix such as Vanguards 60/40 etc 

Process of setting up a SIPP is to fill in an online form which is about as complicated as setting up any online saving account.  The 'difficult' bit is choosing what to invest in.

Marcon

Pipthecat said:

Speak to you umbrella company about which platforms support Salary Sacrifice.  Paystream for example works with Aviva, Fidelity, Hargreaves Lansdown, Interactive Investor and a bunch of others.

The receiving scheme won't be bothered about whether payments are by salary sacrifice or are simply employer contributions, so the only requirement is that the pension product accepts employer contributions.

Pipthecat

Marcon said:

The receiving scheme won't be bothered about whether payments are by salary sacrifice or are simply employer contributions, so the only requirement is that the pension product accepts employer contributions.

I was surprised Vanguard don't. Feels like a missed opportunity.

Marcon

Pipthecat said:

Marcon said:

The receiving scheme won't be bothered about whether payments are by salary sacrifice or are simply employer contributions, so the only requirement is that the pension product accepts employer contributions.

I was surprised Vanguard don't. Feels like a missed opportunity.

Agree - these days you'd expect pretty much all pensions to accept employer contributions. 

Albermarle

One difference with a SIPP ( a proper one anyway) is that contributions remain in a cash fund until you invest them. 
You can set up an ongoing regular investment, but you have to do it.
With workplace and personal pensions, if you do not make any investment decision, your money does not sit in cash and is invested into the default investment option. This suits most people as they do not want/are not capable of making any kind of investment decision even simple ones.

Jojo77_2

Looks like I've been given incorrect information about Nest so ill look more at that.
I'm with Giant umbrella co and they have an option of a standard life SIPP but I can choose another arrangement if I find one. 

 I need to do Salary sacrifice as the contribution will be the first deduction so i'll save on the employers N.I, and some other bits  (which cones off day rate after the salary sacrifice contribution). 

I can't pay in to my former DC pots. One is an occupational workplace trust scheme so not personal pension and you can't contribute once you've left. The other is a master trust which may take contributions but I suspect not salary sacrifice. 

I think a Sipp which takes salary sacrifice contributions will be best from a financial point of view re tax relief at source and employers N.i savings. 

Most SIPS's looks much of a muchness ?  I'll look more at charges. But whatever should I consider ?

I may look to transfer in my other pots. 

I am open to learning more about the funds & investing as I've done some self select before rather than default. I assume as long as I'm actively managing it & looking at fund performance etc its possible. 

Its more given I'm only looking at contributing for 2 years / c50k I just wasn't sure a Sipp & charges would be worth it. 

Is taking restricted advice & a product via my building society a hood idea though - the fees look similar to z whole of market IFA 

MallyGirl

SIPP charges are either based on the value or are fixed. For the sort of money you are talking then a value percentage is going to be cheaper.
Restricted market via FA or bank/building society is not going to be the best option.

Sarahspangles

Jojo77_2 said:). 

Most SIPS's looks much of a muchness ?  I'll look more at charges. But whatever should I consider ?

I may look to transfer in my other pots. 

I am open to learning more about the funds & investing as I've done some self select before rather than default. I assume as long as I'm actively managing it & looking at fund performance etc its possible. 

Its more given I'm only looking at contributing for 2 years / c50k I just wasn't sure a Sipp & charges would be worth it. 

I used the Monevator site to pick a provider that was cost effective on charges for the projected size of my pot. With your other pots, have a close look at the charges you’re currently paying. If these are legacy from old employers you may be on a discounted charge. Or not. It’s too early to worry about bells and whistles when you come to draw down, but you obviously need to find the site user friendly if you’re actively managing your investment choices. 

You mention in an earlier post that you’re 47, in which case it’s not whether a SIPP is worth it for two years’ contributions, it’s what happens in the 10 years before you could draw down that will have more impact.

I currently have this bookmarked - it’s not a recommendation, just a reminder it’s worth checking what offers are running for your shortlisted providers. https://www.ajbell.co.uk/our-services/special-offers