Investing in a SIPP

sk240
sk240 Posts: 474 Forumite
First Post
in Pensions, annuities & retirement planning
Hi,
I'm just asking on behalf of my father whos just approaching retirement.
He has a pot worth just over £350K, and hes looking to invest it in a SIPP.
Hes currently looking at the pruplan 10-40 through a broker which has averaged in the region of 5% interest for the last few years, and its advertised as a lower risk fund.
Would anyone recommend this course of action, or could you suggest any better alternatives?
My father and i are fairly good with finances, but understanding SIPPS and pensions is tricky, and it could be quite costly to get it wrong.


Thanks in advance.

Comments

  • AlanP_2
    AlanP_2 Posts: 3,252 Forumite
    Name Dropper First Anniversary First Post
    Where is the £350k currently and why is he considering putting it into a SIPP?

    What is the plan for this £350k - spend it all on an Annuity at a set date, use it as a drawdown pot for the next 20-40 years?
  • dunstonh
    dunstonh Posts: 116,318 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Hes currently looking at the pruplan 10-40 through a broker which has averaged in the region of 5% interest for the last few years, and its advertised as a lower risk fund.

    Prufund - the definition of failure to provide advice. Put in place by sales people rather than advisers.

    yes, that is a generalisation but prufund is oversold. It ticks the comfort boxes more than it ticks the suitability boxes. A lazy option for those that don't really care.
    Would anyone recommend this course of action, or could you suggest any better alternatives?

    I don't know. Nobody here does because we don't have enough info. It could be right or it could fit the oversold lazy scenario.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • sk240
    sk240 Posts: 474 Forumite
    First Post
    Hi,


    Yes he would be using it as a drawdown.

    I know the fees are a little expensive, but he doesn't want to be playing the stock market, he just wants a simple and safe fund that gives a reasonable return.


    What other info would be usefull?
  • AlanP_2
    AlanP_2 Posts: 3,252 Forumite
    Name Dropper First Anniversary First Post
    Where is it currently as I asked earlier, or to put it another way Why move it?
  • sk240
    sk240 Posts: 474 Forumite
    First Post
    Hi,


    Hes currently got a Scottish widows stakeholder pension and hes a little nervous going forward with Brexit and the possibility of the fund value reducing as its invested in a higher risk account fund than he would like.
    he would go with a guaranteed annuity but returns on those appear to be poor.
    I don't believe hes spoken to Scottish widows, so i have suggested that he does, and also speak to an independent financial advisor.
  • xylophone
    xylophone Posts: 44,348 Forumite
    Name Dropper First Anniversary First Post
    The £350,000 is currently in a SW stakeholder but he wants a pension which would allow drawdown?

    Had he considered part annuity and part drawdown?

    He could consult an Independent Financial Adviser.

    https://adviserbook.co.uk/

    Type in location then filter on left for "confirmed independent" and other requirements.
  • xylophone
    xylophone Posts: 44,348 Forumite
    Name Dropper First Anniversary First Post
    Has your father checked his state pension position?

    https://www.gov.uk/check-state-pension
  • dunstonh
    dunstonh Posts: 116,318 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    I know the fees are a little expensive, but he doesn't want to be playing the stock market, he just wants a simple and safe fund that gives a reasonable return.

    Has he considered an annuity?
    Hes currently got a Scottish widows stakeholder pension and hes a little nervous going forward with Brexit and the possibility of the fund value reducing as its invested in a higher risk account fund than he would like.

    So, again, annuity seems viable for at least some of the money.

    The Prufund has some capital security but you are paying for that in charges. Plus, it has benefitted from a period that has seen unusually high returns from fixed interest securities.
    I don't believe hes spoken to Scottish widows, so i have suggested that he does, and also speak to an independent financial advisor.

    Dont speak to SW. They can only retail their own product and charge for doing so. No point paying for restricted advice when you can pay for independent that can lead to a better product at better prices.

    The pru fund could be suitable. I am just cynical of it because it is overused by people who could be in much better things more suitable for them.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • sk240
    sk240 Posts: 474 Forumite
    First Post
    xylophone wrote: »
    Has your father checked his state pension position?

    https://www.gov.uk/check-state-pension


    Hi, yes he has the full state pension entitlement.
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