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Individual Investments or SIPP?
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[Deleted User]
Posts: 47 Forumite
I have been thinking about investing around £5k to £10k in either the HSBC Global Strategy or VLS60 fund. Maybe a mix of the two. I'd be interested in people's thoughts on that one.
I'm looking for some capital growth through investment in the broad range of classes both of these funds offer across the global markets.
What I'm unsure of is whether to deal with HSBC and/or Vantage separately, or buy these two funds within the SIPP pension I already have with Hargreaves Lansdown.
I do not need to gain access to this money until I retire, and wouldn't want to, if that helps answer the question.
My thinking is the tax relief received on pension contributions would ultimately mean more money invested if I buy these funds under the banner of my SIPP. Can anyone see any pitfalls here?
I'm looking for some capital growth through investment in the broad range of classes both of these funds offer across the global markets.
What I'm unsure of is whether to deal with HSBC and/or Vantage separately, or buy these two funds within the SIPP pension I already have with Hargreaves Lansdown.
I do not need to gain access to this money until I retire, and wouldn't want to, if that helps answer the question.
My thinking is the tax relief received on pension contributions would ultimately mean more money invested if I buy these funds under the banner of my SIPP. Can anyone see any pitfalls here?
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Comments
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SIPP seems logical if you don’t want and won’t need access to it before retirement.0
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If you won't need the money until you retire and you don't have a problem with the lifetime limits for pension, holding the assets in a pension and getting the tax relief seems like a no-brainer.
An exception that doesn't apply to most people is if you are only getting basic rate tax relief now, but you expect to be a higher rate taxpayer all the way through your retirement. Then you would have been better to just use an ISA.
One observation, if you hold a fund through your HL SIPP, the platform admin fee is 0.45% per year on the asset value, while if you hold it at Vanguard (who don't yet offer a SIPP), the equivalent fee is only 0.15%. So you're spending almost a third of a percent a year on admin, which will compound and add up over time, albeit it is much lower than the tax benefits.
A solution is to just change your SIPP provider to someone cheaper, but I appreciate that wasn't your question.0 -
Also worth considering a LISA if you are basic rate and under 40.0
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Then you would need a very very good reason not to use a pension wrapper of some sortcmondynamite wrote: »I'm a higher rate tax payer0 -
If you're not completing Self Assessment returns the don't forget to let HMRC know about the SIPP contribution in due course.
The gross contribution will increase the amount of basic rate tax you can pay, in turn reducing the amount of higher rate tax due.
Any tax relief due comes back to you one way or another, it isn't added to your pension fund like the basic rate relief is.0 -
cmondynamite wrote: »I'm a higher rate tax payer
Unless you need access to the money it's likely to be worth stuffing your pension to become basic rate again!
Alex0 -
Dazed_and_confused wrote: »If you're not completing Self Assessment returns the don't forget to let HMRC know about the SIPP contribution in due course.
Yes, I let them know every year, and they usually adjust my tax code accordingly.0 -
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