Cash SIPP - HL still best option?

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81938427#Comment_81938427

Also in the year before that sale, HL were offering very juicy cashback deals for people transferring in.

Now of course many of these carpetbaggers ( guilty as charged) will have been transferring back out again, once the lock in period ended.

I think all financial providers customer service resource is pretty fixed, so if there is any upsurge in demand for some reason they get easily swamped ( not just HL) .

Veloflyer

https://forums.moneysavingexpert.com/discussion/comment/81938433#Comment_81938433

Thanks both - all understood. I'd agree that the original "ethos" for want of better words may be lost with a private equity firm, and the rise in fees does smack of taking the proverbial - especially if there is no improvement in service. However, I probably do not need to drawdown from them for some years so perhaps a premature question. Reassess nearer the time maybe….As an aside, it is a relatively painless process to transfer out - let's say to Bell for example?

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81938547#Comment_81938547

The fee structure was rearranged, some fees went down ( and some up) .

Transferring from one mainstream provider to another is usually pretty painless, unless one provider is going through a busy patch/IT upgrade/reorganisation etc The main decision to be made is whether to transfer as cash, or 'in specie'.

The former is quicker, but for maybe 2 to 5 days you will be out of the market. If the market were to move in that period you could gain or lose. In Specie means transferring the actual investments, which takes longer, occasionally a very long time. Of course you can only transfer investments that are available on both the ceding and receiving platforms.

From time to time some providers offer cashback for transferring to them.

masca

I'm so indecisive these days! 🤣 And consequently I'm still trying to decide if now is the time to start my SIPP? Am I correct in thinking that my initial 1st year contribution of £2,880 will only actually net me about £200 including tax relief and interest if held in a cash HL SIPP for 7 years, compared with leaving it in a savings account earning 4.5% (which I appreciate could/will drop)? Or is my maths going badly wrong somewhere? TIA again!

Albermarle

The £2880 will attract £720 in tax relief, so the SIPP will get £3600.

You can take 25% tax free, but if you have to pay tax at 20% on the rest the overall tax benefit per year will be £180.

If you do not have to pay tax then you gain the £720.

Plus the interest.

Better make your mind up quick, as today is the last working day of the tax year.

DavidT67

https://forums.moneysavingexpert.com/discussion/comment/81938547#Comment_81938547

When HL announced their fee increases, I initiated half a dozen transfers out of family accounts to lower cost / free providers which where offering cashback. ISAs in-specie took less than two weeks, SIPPs once we'd aligned holdings with that available on the new provider a month or two.
The customer service channels on the new providers are noticeably worse than HL, with no telephone support and what seem like AI-generated responses, their user interfaces are much worse, no linked accounts, return reporting often wrong, statements are minimal and their trade pricing somewhat opaque, (always do limit orders if you can't accept or decline an offered trade !), and they don't offer pension drawdown.
So once we've completed the cashback lock-in period we'll be moving on again to whomever then has a cashback deal. The deals of worth thousands, so it's well worth the effort.

masca

https://forums.moneysavingexpert.com/discussion/comment/81947232#Comment_81947232

Thank you. I do understand that. It's the leaving it languishing at 2.x% (or whatever) for the next 7 years that's causing me consternation... And I'm not sure that I want to risk the market as 7 years isn't very long in that sense, and so it will very likely be held as cash throughout.

BTW, do HL not credit payments on weekends/bank holidays?

Thanks.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81947549#Comment_81947549

do HL not credit payments on weekends/bank holidays?

I think normally yes, but as it is the end of the tax year, some providers have a deadline of today. However from HL website it looks like you can start a SIPP and credit it over the weekend.

Veloflyer

https://forums.moneysavingexpert.com/discussion/comment/81947248#Comment_81947248

I am happy to sacrifice good service over cheaper platforms with poor service delivery. I believe Bell is a wee bit cheaper for me over HL, and Bell's service - so far - has been pretty good. The cashback is interesting.

I don't intend to do too much with either platform over the next 5 years, save enacting drawdown with Bell next year. This seems fairly straightforward, but doubtless we shall see.