Income drawdown vs annuity purchase at retirement

EdInvestor

Hi stuttard

Here are a few to look into:

https://www.sippdeal.co.uk ( the e-pioneer)
https://www.epml.co.uk (can also handle protected rights in a cash account)
https://www.alliancetrust.co.uk ( good for investment trusts)
https://www.hargreaveslansdown.co.uk (good for fund investment)

Also many discount brokers will provide them.

oceanblue_3

stuttard wrote:

Does anyone know of the cheapest company providing income draw down for SIPPS ?

Hi Stuttard

Be careful with the information and the links given to you by Edinvestor: Hargreaves Landsdown do not offer a drawdown facility; the other providers' charges are pretty hefty when drawdown is in operation.
As dunstonh has suggested elsewhere, it might be better to wait until early-2006 to see what some of the larger providers are proposing: it looks as though investment in insured funds will offer superior flexibility and charges.

EdInvestor

Oops, quite right, HL doesn't offer drawdown ( no-one can understand why)

Of course investment style impacts charges in SIPPs. OB will no doubt be thinking about funds, whereas it is much cheaper to base a drawdown fund on shares and/or gilts where the SIPP's flat rate charges will amount to very little on an average fund.

oceanblue_3

EdInvestor wrote:

it is much cheaper to base a drawdown fund on shares and/or gilts where the SIPP's flat rate charges will amount to very little on an average fund.

Hi Stuttard

Take this with a pinch of salt: it is EdInvestor's opinion, and it is not a fact.

EdInvestor

Here's another opinion, not a fact:

...it might be better to wait until early-2006 to see what some of the larger providers are proposing: it looks as though investment in insured funds will offer superior flexibility and charges.

It's interesting to note the efforts by some people (not necessarily on this site) at the moment to encourage delay by people looking at SIPPs, because the big insurers have not yet got their products ready - these are the ones which pay commission to advisors.

The ones I've suggested are execution only and don't pay commission.

dunstonh

EdInvestor wrote:

Here's another opinion, not a fact:



It's interesting to note the efforts by some people (not necessarily on this site) at the moment to encourage delay by people looking at SIPPs, because the big insurers have not yet got their products ready - these are the ones which pay commission to advisors.

The ones I've suggested are execution only and don't pay commission.

Ed, you come out with some silly things at times but that is just plain stupid.

We are in a situation where the full rules are not yet known. We also have a situation where most of the providers have not given details of their offerings yet because they are waiting until the full rules are known.

You also have the forthcoming launch of hybrid/insured SIPPs which are going to be cheaper than current cheap SIPPs plus should allow protected rights to be included.

So, someone going into a SIPP now, including the cheap providers you continue to mention, could well find themselves in an obsolete version of the product within 6-12 months and have to pay again to switch to another SIPP provider.

Your observation that the big insurers pay the big commissions is incorrect and inconsistent with reality. Although it is very consistent with your posts where you ignore the facts that are presented to you so you can continue your sniping against the advisors here.

You say someone should do a SIPP now. I say they should wait unless there is an asset class they want access to that only a SIPP can do. Indeed, I have over a dozen clients on my list at this stage waiting to do a SIPP but I have told them not because of what is coming. Virtually all of these are likely to end up in the hybrid/insured SIPP rather than the full one.

If I was to do those now, I would earn more in fees/commission and I would earn twice probably as the products next year are going to be better than the current product so I would have to move them again. They would of course incur charges/fees twice.

Please do not insult the posters on this board with your snide remarks. The regulars have got used to them and ignore them. However, someone that doesn't realise that you do not actually know what you are talking about may take you seriously and that would be a shame.

EdInvestor

You also have the forthcoming launch of hybrid/insured SIPPs which are going to be cheaper than current cheap SIPPs..

Very hard to believe, sorry. There is already one on the market, by Standard Life, which has done excellent business.No way is it anything like as cheap as the online execution only SIPPs that I'm talking about.

The proteced rights matter is an issue. But the rules for SIPPs have been around for years and the alterations are not very major, despite all the hype: there's no need to wait for clarification, except on the PR matter, and even there it can just be added in if allowed.Standard Life has already shown this.

dunstonh

Very hard to believe, sorry. There is already one on the market, by Standard Life, which has done excellent business.No way is it anything like as cheap as the online execution only SIPPs that I'm talking about.

Standard Life do not offer a hybrid/insured SIPP. Personally, I think they do once they see others doing it. Or more likely, they will alter their pricing structure so if you use the investment funds, there will be no SIPP charges but if you go external investment/asset classes you will pay for it.

Basically, (repeating what I have said before), you are looking at a fund supermarket with zero charges on the SIPP wrapper but with the usual charges on the unit trust/OEIC funds in exactly the same way as the ISA wrapper works with those same funds.

It does not surprise me that you find it hard to believe as your knowledge comes from media articles. Product providers do not make information like that available in press releases until they are ready to do so. However, IFAs get told what is coming and many are also involved in the building of the products to ascertain whether we would actually recommend them or not.

EdInvestor

dunstonh wrote:

Or more likely, they will alter their pricing structure so if you use the investment funds, there will be no SIPP charges but if you go external investment/asset classes you will pay for it.

Basically, (repeating what I have said before), you are looking at a fund supermarket with zero charges on the SIPP wrapper but with the usual charges on the unit trust/OEIC funds in exactly the same way as the ISA wrapper works with those same funds.

So the SIPP is "free" (ie no AMC) if you use the in-house funds, but incurs a charge if you use external funds?

And the (visible and invisible) charges on all the funds (of both types) will remain the same as now, will they?

dunstonh

So the SIPP is "free" (ie no AMC) if you use the in-house funds, but incurs a charge if you use external funds?

And the (visible and invisible) charges on all the funds (of both types) will remain the same as now, will they?

Careful here as you are quoting two things here with different answers.

The hybrid/insured SIPP from the fund supermarket (not all fund supermarkets will offer this initially) will have no charges on the SIPP but will give access to all the unit trust/OEIC funds in the fund supermarket on the same basis as they are available for ISAs (or direct holding if UT/OEIC).

My guess with Standard Life is that they alter their product once they start losing business to the other SIPPs (which will happen). Again, I guess that they will remove the SIPP charge when you invest in their mini fund supermarket range with all the charges existing on the funds only. If you do want to invest in other things, then you will pay the charges for using external investments.