Warning re Stakeholders/Personal Pension vs SIPPS



  • PalPal Forumite
    2.1K Posts
    An assumption on my part based on the enormous size of the investment fund industry in this country. Are you seriously suggesting that most people who currently have a personal pension would much rather be invested in self-selected individual stocks?
  • EdInvestorEdInvestor
    15.7K Posts
    I don't know Pal. Do you? It's only very recently been possible to invest a personal pension fund cost effectively in individual stocks. There are plenty of people invested in individual stocks outside pensions.
    Trying to keep it simple...;)
  • Investment trusts anybody ?

    I mean - WOW - the Barings Eastern European is roaring ahead and so is the Fleming Indian
  • EdInvestorEdInvestor
    15.7K Posts
    PLus number of shareholders

    1 - HBOS - 2,588,000
    2 - BT GROUP - 1,604,000
    3 - MM02 - 1,578,000
    4 - NATIONAL GRID TRANSCO - 1,435,000
    5 - BRADFORD & BINGLEY - 1,181,000
    6 - CENTRICA - 1,160,000
    7 - BG GROUP - 998,000
    8 - LLOYDS TSB GROUP - 974,000
    9 - FRIENDS PROVIDENT - 890,000
    10 - BARCLAYS - 876,000
    11 - AVIVA - 875,000
    12 - ALLIANCE & LEICESTER - 699,000
    13 - VODAFONE GROUP - 619,000
    14 - INTERNATIONAL POWER - 560,000
    15 - SCOTTISH POWER - 450,000
    16 - SCOTTISH & SOUTHERN ENERGY - 447,000
    17 - BAA - 382,000
    18 - BP - 356,000
    19 - ROLLS ROYCE GROUP - 319,000
    20 - MARKS & SPENCER GROUP - 317,000

    Moneysavers might like to compare this with the top 20 companies in the FTSE100. If you have any money in shares via a fund like an index tracker or a managed fund, then the majority of it will be invested in these shares:

    Royal Dutch(Shell)
    GlaxoSmithKline (drugs)
    Royal Bank of Scotland
    AstraZeneca (drugs)
    Diageo (drinks)
    British American Tobacco
    Anglo American (mining)
    BT Group
    Rio Tinto (mining)
    BHP Billiton (mining again)
    National Grid Transco
    BG Group

    Rather a lot of banks in both, and a lot of utilities in the first one as well. The second has a lot of oil and gas and mining as well as banks.

    Both of them would be improved IMHO from the risk point of view by more diversification. The top list will do better than the bottom on the whole because its companies pay a higher dividend yield. :)
    Trying to keep it simple...;)
  • I have a SIPP with Hargreave Landsdown (like a previous poster). Charges are not far of setting up and running ISA.

    No initial charge and if you invest in unit trusts you get a discount off the usual 5% initial charge and pay only aroun 5%.

    They have very efficient customer service.

    If you are young take a few risks and put some of the fund in emerging econonies I have and so far in the last six months those investments have gone up by aroung 18%.
  • PalPal Forumite
    2.1K Posts
    "pay only around 5%"?

    Are you sure about that? That's very high.
  • whiteflag_3whiteflag_3
    1.4K Posts
    Edit by Pal: Remove quote repeating advertising post that has been removed.

    Thought adverts were prohibited on this site!
  • Paul_HerringPaul_Herring Forumite
    7.5K Posts
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    whiteflag wrote:
    Thought adverts were prohibited on this site!
    They are. Just reported it.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • PalPal Forumite
    2.1K Posts
    If you PM me in future I can delete or modify advertising posts. The proper mods are often too busy to get around to things like this.


    Pal - Pensions BoardGuide
  • NeilWNeilW Forumite
    143 Posts
    Part of the Furniture 100 Posts Combo Breaker
    If you want to invest in funds (which most people do) you have more choices, and SIPPs are rarely the cheapest for fund investment as the annual and underlying fund charges are on top of the SIPP charges.

    Fund charges are problematic because nobody ever links them to performance. I've spent a lot of time scratching my head over this and I can't work it out.

    Currently the industry is obsessed with charges. However they express it in a peculiar way. Let me give you an example of a product, the Halifax Web Saver, but I'll express it in the same format that a Unit trust is described.

    Halifax Web Saver.

    Gross Yield 6.7% (the amount Halifax gets in from an unsecured loan).
    Charges 2.05% per annum (the difference between the gross yield and net paid).

    Clearly if the Halifax Web Saver was a Unit Trust it wouldn't be allowed in a stakeholder pension. Obviously it is a very risky product!

    You can't decouple charges from performance, whatever the FSA might say.

This discussion has been closed.
Latest MSE News and Guides