Fund & Share to a SIPP: is it a good idea?

Lilio8

Good morning.

I inherited ½ of my dear latest’s ISA (with Hargreaves Lansdown; let’s call it HL for brevity). But as we didn’t make it to get married, I had to open a regular Fund & Share account, also with HL’s platform, where his ½ of the ISA was transferred into. I’ve already transferred some of the shares into my HL ISA and will have to wait till 6th April ‘26 to transfer some more. The returns from the Fnd&Shre will most probably be taxed.

I do have a small old stakeholder (just under £15,000) pension with Aviva that I’d like to move elsewhere, since Aviva’s charges aren’t low (as I found out they're about 0.60%--ouch!). 

Would it be a good idea to open a SIPP and transfer stocks from the HL Fund & Share into a SIPP to avoid paying lots of tax, and shove the old stakeholder also into the same SIPP?

Although it would be practical to have a HL SIPP and keep everything within one platform, I find that the costs with HL aren’t low. Is an HL SIPP the only viable option? And when will I be able to drawdown (the 'drawdown' bit is something I'm still not quite clear about)?

dunstonh

I do have a small old stakeholder (just under £15,000) pension with Aviva that I’d like to move elsewhere, since Aviva’s charges aren’t low (as I found out they're about 0.60%--ouch!). 

0.6% is not ouch territory, yes you can get cheaper if you move to passive and a low cost provider but remember that Aviva is 0.6% all in (plus it gets fund based discounts - which are not relevent to your small value but could be later).   HL's platform charge is 0.45% plus fund charges on top.    

Would it be a good idea to open a SIPP and transfer stocks from the HL Fund & Share into a SIPP to avoid paying lots of tax, and shove the old stakeholder also into the same SIPP?

It may be.  It may not be.  It depends on your objectives and what you are comparing.

Is an HL SIPP the only viable option?

Of course not. There are plenty of viable providers out there.

And when will I be able to drawdown (the 'drawdown' bit is something I'm still not quite clear about)?

It depends on your age and intended drawdown method (not all providers support all methods - so you would want to be with one that supports the method you are intending to use).

DRS1

Are you employed or self employed? Are you already contributing to a pension?  If the answer to both those questions is no then the maximum you can contribute to a pension in a tax year is £3600 gross (£2880 net).  Quite a bit less than you can put in an ISA.

Albermarle

If you are employed, do you already have a workplace pension. You may well be able to transfer into that as an alternative.

jimjames

Lilio8 said:

Would it be a good idea to open a SIPP and transfer stocks from the HL Fund & Share into a SIPP to avoid paying lots of tax, and shove the old stakeholder also into the same SIPP?

It might be just your terminology but you can't transfer stocks into a SIPP. You can only add cash so you will need to sell the stocks first and use the cash to pay into the SIPP. Also reliant on you having earnt enough to pay in that amount into the SIPP.

Lilio8

DRS1 said:

Are you employed or self employed? Are you already contributing to a pension?  If the answer to both those questions is no then the maximum you can contribute to a pension in a tax year is £3600 gross (£2880 net).  Quite a bit less than you can put in an ISA.

I'm self-employed, sole trader, contributing to a stakeholder pension and pay National Insurance contributions.

Lilio8

jimjames said:

Lilio8 said:

Would it be a good idea to open a SIPP and transfer stocks from the HL Fund & Share into a SIPP to avoid paying lots of tax, and shove the old stakeholder also into the same SIPP?

It might be just your terminology but you can't transfer stocks into a SIPP. You can only add cash so you will need to sell the stocks first and use the cash to pay into the SIPP. Also reliant on you having earnt enough to pay in that amount into the SIPP.

That would be the Bed & SIPP , if I understand correctly.

Lilio8

DRS1 said:

Are you employed or self employed? Are you already contributing to a pension?  If the answer to both those questions is no then the maximum you can contribute to a pension in a tax year is £3600 gross (£2880 net).  Quite a bit less than you can put in an ISA.

I'm self-employed, sole trader. I thought that the max one can contribute to a SIPP was £60,000.

Lilio8

dunstonh said:

I do have a small old stakeholder (just under £15,000) pension with Aviva that I’d like to move elsewhere, since Aviva’s charges aren’t low (as I found out they're about 0.60%--ouch!). 

0.6% is not ouch territory, yes you can get cheaper if you move to passive and a low cost provider but remember that Aviva is 0.6% all in (plus it gets fund based discounts - which are not relevent to your small value but could be later).   HL's platform charge is 0.45% plus fund charges on top.    

Would it be a good idea to open a SIPP and transfer stocks from the HL Fund & Share into a SIPP to avoid paying lots of tax, and shove the old stakeholder also into the same SIPP?

It may be.  It may not be.  It depends on your objectives and what you are comparing.

Is an HL SIPP the only viable option?

Of course not. There are plenty of viable providers out there.

And when will I be able to drawdown (the 'drawdown' bit is something I'm still not quite clear about)?

It depends on your age and intended drawdown method (not all providers support all methods - so you would want to be with one that supports the method you are intending to use).

I'm self-employed, sole trader, paying N.I.+ small stakeholder. I'm in my early 60s.

Eco_Miser

Lilio8 said:

DRS1 said:

Are you employed or self employed? Are you already contributing to a pension?  If the answer to both those questions is no then the maximum you can contribute to a pension in a tax year is £3600 gross (£2880 net).  Quite a bit less than you can put in an ISA.

I'm self-employed, sole trader. I thought that the max one can contribute to a SIPP was £60,000.

It is, but there are other, smaller, maxima, that usually limit contributions more, to 100% of earnings, or £3600 if your earnings are less than that. 
There are probably other rules that only apply in particular circumstances, but I only know the broad outlines.

jimjames

Lilio8 said:

DRS1 said:

Are you employed or self employed? Are you already contributing to a pension?  If the answer to both those questions is no then the maximum you can contribute to a pension in a tax year is £3600 gross (£2880 net).  Quite a bit less than you can put in an ISA.

I'm self-employed, sole trader. I thought that the max one can contribute to a SIPP was £60,000.

Are you earning over £60k?