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    • naive investor
    • By naive investor 10th Apr 18, 10:16 PM
    • 15Posts
    • 2Thanks
    naive investor
    consolidating pots into sipp
    • #1
    • 10th Apr 18, 10:16 PM
    consolidating pots into sipp 10th Apr 18 at 10:16 PM
    I need some Sipp help please.

    I have been dithering over amalgamating all my pension pots (all money purchase) into a Sipp for quite a long while. I really struggle to get my head round pensions so would like a bit of general advice.
    I know it makes sense (or think it does) to open a SIPP. Partly because I am happy making my own investment decisions and also as I am 63 now and comfortably off I believe that my kids could benefit if I don’t ever go to drawdown. It would reduce IHT if I run down my cash pile. It would also be flexible if I did go into draw-down.

    I have lots of pensions! Almost without exception they perform pretty averagely.
    40 % -Largest pot is in Aviva/Friends life index funds – charges 0.4%. They perform OK.

    11% - I have some Pru Funds – charging 1% plus

    21% -I still have an Equitable Life with-profits and no GAR charging 1.5%
    including
    Equitable life managed units charging .75%

    My biggest issue is with Aegon /SE
    28% -I have Aegon / Scot Eq funds with high cost averaging 1.4% if you take into account plan charges.
    This pot has some in The ‘With Profits Endowment’ fund which is guaranteed to have a value of £1.03 at 65 and last time I looked was about 10% below that.
    It has some in the High Equity WPE fund which guarantees that the unit price won’t fall if held to retirement date.

    Are any of these worth keeping separate from the SIPP either because they have lower charges than the SIPP or because the With profits Endowment guarantee is worth having?

    And of course is Sipp the best way?

    If I go this way I will probably go for a low cost fixed price platform- but which?

    Sorry this is a lot but any thoughts on all or part of this would be helpful and might push me over the edge.

    Thanks
Page 1
    • tacpot12
    • By tacpot12 10th Apr 18, 11:09 PM
    • 1,383 Posts
    • 1,188 Thanks
    tacpot12
    • #2
    • 10th Apr 18, 11:09 PM
    • #2
    • 10th Apr 18, 11:09 PM
    You will find it very easy to achieve lower fund charges for every pension you list above when held in a SIPP. But the platform fees are then extra on top of the fund charges, whereas you have no platform fees with your current pension providers.

    I recently did a similar consolidation exercise (3 DC pensions to a SIPP), but for me the main reasons were:
    - the funds available in one pension were very limited and not performing well
    - one of the providers didn't offer any form of drawdown
    - the other provider charged at lot when the pension was in drawdown, albeit their charges during accumulation were very low.

    (I'm about a year aware from going into drawdown.)

    Have you investigated what the charges will be with each of your providers when you are in drawdown? It may make sense to consolidate with one of your existing providers.

    You can compare the costs of many of the SIPP providers via this thread: http://forums.moneysavingexpert.com/showthread.php?t=5583030
    • zolablue25
    • By zolablue25 11th Apr 18, 9:59 AM
    • 1,584 Posts
    • 469 Thanks
    zolablue25
    • #3
    • 11th Apr 18, 9:59 AM
    • #3
    • 11th Apr 18, 9:59 AM
    I have a fair few pots as well. One of my small pots (Circa £10K) is with Scottish Widows but has a GAR of £98.00/£1000 per annum. I've decided to leave that one as current rates are so far below that I would have to have mega investment performance to enable a similar return Obviously, when I come to retire annuity rates may have improved (but I doubt they will be back up to that level)
    • Dox
    • By Dox 11th Apr 18, 10:40 AM
    • 938 Posts
    • 719 Thanks
    Dox
    • #4
    • 11th Apr 18, 10:40 AM
    • #4
    • 11th Apr 18, 10:40 AM
    If you are planning to use a SIPP to help manage your IHT position, then possibly GARs aren't a big deal for you (normally they are very important!).

    You don't say how much is in each pot - remember that if you have any pots with 'safeguarded benefits' such as a GAR (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/495377/pension-benefits-with-a-guarantee-factsheet-jan-2016.pdf), and the transfer value is £30,000 or more, you are required to demonstrate that you have received advice from a properly regulated and authorised independent person before you can transfer. Some SIPP providers will only accept transfers in if the advice is that the transfer is in your interests.
    • naive investor
    • By naive investor 12th Apr 18, 2:04 AM
    • 15 Posts
    • 2 Thanks
    naive investor
    • #5
    • 12th Apr 18, 2:04 AM
    • #5
    • 12th Apr 18, 2:04 AM
    Thanks for the help

    I was hoping for a bit of feedbck on the Equitable WP funds and the Scottish Equitable ones with guaranteees as well

    tacpot12
    I have worked out that if I use a SIPP like Fidelity with a % charge then it would indeed be more costly to put them in a SIPP. If I used say Interactive (who I already have an account with it could be cheaper - in cost terms).

    I hadn't even considered keeping the pots with any of the providers because I didn't appreciate they did 'drawdowns' - they don't seem to have told me. Would the IHT benefit still be possible? I shall check this out.

    zolablue2
    I don't think my Gars are all that good- but maybe better than bank interest I suppose.

    Dox
    Again I hadn't thought my Gars would be considered a 'safeguarded benefit' so thanks. As it happens they are worth £29,000. and are only a couple of the Scottish Equitable funds. I'll check this too.
    • DjMac
    • By DjMac 12th Apr 18, 11:50 AM
    • 1 Posts
    • 0 Thanks
    DjMac
    • #6
    • 12th Apr 18, 11:50 AM
    • #6
    • 12th Apr 18, 11:50 AM
    My biggest issue is with Aegon /SE


    The WPE fund had a guarantee of around 5.5 % pa based on the time between original investment and retirement date. If you look at your current unit holding in WPE fund and the current bid price / number of units and use 1.03 as the price at your retirement you will see the guarantee and value of the guarantee. The fund will have bonuses added and terminal bonus (not guaranteed) so take care with this pot. Presume there is no guaranteed annuity rate with your contract.
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