SIPP, Hargreaves Lansdown and Funds

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  • dunstonh
    dunstonh Posts: 116,387 Forumite
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    EdInvestor wrote:
    Already we have an excellent reason for steering well clear of SIPPs run by insurance companies.

    i didnt say insurance companies. The current discounting by some on full SIPPs is not sustainable. It is done to buy business at this stage and is loss making at this time. The insurance companies are not actually discounting much at all on full SIPPs which is why they seem so much more expensive.

    The hybrid SIPP is a much cheaper proposition for a provider.

    I know you like full SIPPs Ed and IIRC, you utilise the benefits of a full SIPP. However, most are not utlising those full features and sticking with funds only and having a lower cost option with less admin, all available on a funds supermarket platform surely has to be welcomed?
    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.
  • newmoneyuser
    newmoneyuser Posts: 27 Forumite
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    one nice thing about Hargreaves Lansdown's SIPP is that they pay a good rate on cash held within the SIPP, I was a Sippdeal customer in the past but moved across because of this.
  • cheerfulcat
    cheerfulcat Posts: 3,338 Forumite
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    newmoneyuser, that depends on how much cash you have in your account. The HL rates are tiered; you only get the higher rate on the amount that comes into that band. It actually makes very little difference unless you hold very large sums in cash. And HL customer service stinks...
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
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    It's interesting to look at the HL product more closely. I have recommended it in the past as the best Sipp for funds for people making regular contributions, as I understand it doesn't impose dealing charges on each contribution , so is cheaper than a regular Sipp which will charge a dealing fee every time you buy.

    But the reports seem to suggest this is outweighed by other disadvantages - poor customer service, and inept management of share brokerage being the main ones mentioned.

    There might be a couple of ways round this fund problem at the other better Sipps come A day.

    First you can always save up the regular contributions in the Sipp cash account for say 6 months, until you have accumulated enough to make it cost effective to make a new fund purchase.You won't get a very interest high rate, but it is tax free.

    Alternatively, as there is no "use it or lose it" problem with pension annual allowances anymore, you could save up the contribution money outside the Sipp and then put in a single premium once a year, incurring only one dealing fee. [Note that you are actually paying a fee to make regular contributions with lifeco pensions, it's in the 1.5% AMC - choose a SIPP without an AMC].

    Some people who buy shares do this, using the very cheap Halifax Sharebuilder account (1.50 a trade :)) in conjunction with a Sipp (or an ISA) to build up a single premium and then selling and rebuying annually in the Sipp or ISA and it works well. But only for shares, not funds.
    Trying to keep it simple...;)
  • Pal
    Pal Posts: 2,076 Forumite
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    EdInvestor wrote:
    [Note that you are actually paying a fee to make regular contributions with lifeco pensions, it's in the 1.5% AMC - choose a SIPP without an AMC].

    No - you are paying the AMC in respect of the money you have in the fund. Whether or not you pay regular contributions or a lump sum is irrelevant.

    So which SIPP has no AMCs on the funds that it allows you to invest in?
  • newmoneyuser
    newmoneyuser Posts: 27 Forumite
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    cheerfulcat:

    I can't comment on any issues with hargreaves's support as I've not had any issues.
    As for the interest rates from the 2 companies, the only time SIPPDEAL pays better if you have less than around £3,000 as both companies have tiered rates.

    Also SIPPDEAL now has a base fee per year of £80 rising £160 if you have assets of £50,000+ in the fund. HL charges 0.5% up to a maximum of £200, so for small funds HL
    is better. For large funds with a large cash balance HL is also better as they pay 4.25% for cash above £7,000 while SIPPDEAL is only paying 2.75% for the same amount.
  • cheerfulcat
    cheerfulcat Posts: 3,338 Forumite
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    newmoneyuser wrote:
    I can't comment on any issues with hargreaves's support as I've not had any issues.

    I have; that's why I'm intending to leave.
    As for the interest rates from the 2 companies, the only time SIPPDEAL pays better if you have less than around £3,000 as both companies have tiered rates.

    Sippdealextra pays the applicable rate on the entire amount; HL only pays on the specific tier. Unless you keep vast amounts in cash it makes very little difference - on £20,000 HL pays roughly £20 p/a more.

    But, as I said, I'm leaving largely because the customer service is lousy.
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
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    Perhaps I could just clarify something about Sippdeal, which actually has two separate services.

    First is Sippdeal itself, which has no annual management charge.

    https://www.sippdeal.co.uk/charges.asp

    Second is Sippdealextra which allows you to use your own stockbroker and does have a (low) management charge.

    http://www.sippdealxtra.co.uk/charges.asp
    Trying to keep it simple...;)
  • Pal
    Pal Posts: 2,076 Forumite
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    While you are here Ed can you please clarify:
    Pal wrote:
    So which SIPP has no AMCs on the funds that it allows you to invest in?

    There is also a massive difference between HL being "the best SIPP for funds" and HL being "the best Pension vehicle for funds", the latter being implied by you in previous posts.

    Which is it and why?
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
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    Low cost Sipps don't usually apply AMCs to funds - indeed they often don't have AMCs at all.Funds themselves may have AMCs.

    By comparison with other low cost Sipps, the HL one appears to be the cheapest for people wishing to invest in funds with regular contributions.

    Other Sipps may be more competitive for those with a lump sum to invest, and for those who are interested in shares or other non-fund investments.
    Trying to keep it simple...;)
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