SIPP + Investment Options

dunstonh · 10 February 2018 at 2:03PM

dunstonh, thanks for that mate. So if one was to go ahead with this SIPP, do you have any recommended SIPP providers / funds to choose when opened (HL, Cavendish or maybe wait for Vanguard)?

There is no point me telling you which providers (even if the FCA allowed it). I deal with the advice market. The providers that cater for advisers are different to the DIY market. I will leave that for others.

Also, since I would be putting my total allowance for this year, which would leave me with the remaining £7000.00 would you advise half and half VLS60 and a VLS 80..?

What do you gain by doing 50/50 into each?

Oh and one other thing, if I dont have a stocks and shares ISA, should I be considering that Vanguard ISA first before the VLS range?

I personally wouldnt go with a tied provider offering own brand funds. We are already seeing alternative fund houses come in with similar options and undercutting Vanguard. If the provider can only offer their own funds, then you are stuck with them until you transfer out. That means being out of the market for upto a week and at this level of margin, the movement in prices is likely to be greater than the reason you are transferring. If you want VLS, then fine. However, stick with a provider that gives you choice in the market.

dqnet · 10 February 2018 at 4:11PM

I think you're getting a bit muddled, you buy VLS or an alternative from within the ISA or SIPP.

Oh, but in the Vanguard case, they don't offer a SIPP so when buying one of their VLS funds wouldn't I be opening a general account and then the chosen VLS option (60,80, etc.)? Just out of interest isn't a VLS basically Vanguard Life Strategy Funds or is it a common name for something else?

What do you gain by doing 50/50 into each?

Possibly a misunderstanding, I read a few posts here doing that to get an overall 70 product as such.

Yikes, I feel so new to this!

Eco_Miser · 10 February 2018 at 5:12PM

Yes , VLS is Vanguard Life Strategy, and the funds are available, in an ISA, SIPP or unwrapped, on virtually any funds platform, not just Vanguard's own.

dunstonh · 10 February 2018 at 5:57PM

Possibly a misunderstanding, I read a few posts here doing that to get an overall 70 product as such.

The difference in return between 60 and 80 is small. So, trying to build a 70 (which would go out sync and head towards 75 in growth periods and to 65 in negative is just overdoing the micromanagement. Pick one or the other.

cjv · 10 February 2018 at 7:09PM

dqnet wrote: »

Thanks cjv, I'll have a look into them. Have you used these Vanguard funds? Maybe even these Vanguard retirement funds?

It's just I had this money and would immediately like to get it invested into my future pension plan but just don't know where to start.

I do have a Vanguard fund in my Cavendish SIPP, yes. I did not bother with the retirement funds as I want to control my own equity allocation.

I kept it simple until I can educate myself more, I split my monthly contributions 50/50 between Vanguard LS80 and HSBC Global Dynamic. The no fee for transfers out was important to me as a new investor as my outlook may change in the future and I will not feel locked in to one provider.

It was very simple and straight forward to open the SIPP. You sign up, setup your Direct Debit and pick your funds and the share of your contribution you wish to go to each. You can switch or add new funds at anytime easily.

Then you sit back and relax, I hope

dqnet · 10 February 2018 at 8:22PM

Simply brilliant. I think i've finally come to understand how it works.
I'll drop a message here if I need a little more help.

Thank you all. You've been fantastic

dqnet · 15 February 2018 at 1:39PM

Hi again, I've decided to go ahead and open my SIPP this week. I know the funds I'll be buying too but my question was how does the technicalities work..?

So when I put the full £2880.00 does the taxman automatically make these £3600.00 immediately or do I have to wait a certain period of time?

Also, If I was to purchase funds using the £3600 (when they are available) and I start to work later this year, I can always add more money up to the 40k allowance and continue as usual right (buying more of the same funds or just others)?

Cheers folks

p.s. what would you recommend I do with the remaining 7k. I'd like to invest these longterm and since I would have used my unemployment SIPP allowance do you advise I put the remaining amount into a lifetime ISA or S&S ISA or both..? (4k lifetime, 3k S&S) for example?

Thanks!!

dunstonh · 15 February 2018 at 2:03PM

So when I put the full £2880.00 does the taxman automatically make these £3600.00 immediately or do I have to wait a certain period of time?

Depends on the provider. Some prefund the tax free cash and add it at the same time. Others wait 6 weeks until HMRC have paid them and add it to your pension then.

Also, If I was to purchase funds using the £3600 (when they are available) and I start to work later this year, I can always add more money up to the 40k allowance and continue as usual right (buying more of the same funds or just others)?

Yes. it is tax year earnings as a whole that matters. Not when they were paid in the tax year

ColdIron · 15 February 2018 at 2:05PM

dqnet wrote: »

So when I put the full £2880.00 does the taxman automatically make these £3600.00 immediately or do I have to wait a certain period of time?

Your pension manager will request it from HMRC, some are fast, others can take a month or so

Also, If I was to purchase funds using the £3600 (when they are available) and I start to work later this year, I can always add more money up to the 40k allowance and continue as usual right (buying more of the same funds or just others)?

There is an earnings limit as well as the £40,000 allowance. If you earned £15,000 this financial year then that is the maximum you can contribute (£12,000 by you and £3,000 by HMRC) regardless of the £40,000 allowance. If you had already contributed £2,880/£3,600 you would need to deduct it

dqnet · 16 February 2018 at 11:55AM

Perfect - thank you.

By the way, I'm assuming I should wait for the tax relief money to come through first otherwise I would be investing with the £2880 and when the remaining amount comes in it would require a separate investment fee as it counts as a second fund / issue?

SIPP + Investment Options

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