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SIPP DRAWDOWN - who has lowest fees?
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banjofred
Posted: 19 February 2012 11:10:54(UTC)
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I am reluctantly considering moving from HL as I now find that my drawdown has to be split in two and for each they charge £90 per 3 yearly statement, which is compulsory

I calculate that this £180 x 3 for next 9 years will cos me 0.55% of my fund!!!

Half a percent for a computer printed form

some others seem to be worse with SIPP Deal wanting £100 a year, and others in crazyville (do they have customers?)

I am not clear about Bestinvest, who seem to offer "free" drawdown, but lower down mention £100 charges. They also seem to want £25 a quarter for each share held in the SIPP

Others are wrose

Overall its a minefield of usury. These boys are bleeding our funds bit by bit

So my question is (assuming over 50 grand SIPP, as some dearer for less)

Which is the best SIPP? I tried googling it but its not exactly cut and dried

Are they safe as at least HL is FTSE listed (Sippdeal seems to have "an address" where money is held). I know in theory we have some govt protection but in reality you know what thats worth.

I dont really want to move my SIPP but hate being gypped. these little extras really pee me off.

Also HL have the app for online trading. Do others do this?

ta

banjo
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Chart Trader
Posted: 19 February 2012 11:27:47(UTC)
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start with SIPPDEAL, I doubt when u compare the other companies charges they will be able to come any where near. My Sipp is with them, excellent service, they charge £9.95 for all internet deals more expensive for deals over the telephone.
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banjofred
Posted: 19 February 2012 13:59:40(UTC)
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Thanks Chart Trader.

I have had a look at SIPPDeal, but they seem ot have some extras like this:

If you set up an income drawdown pension, including paying any lump sum benefits

£150 + VAT

If you designate additional funds or request a review of income levels under income drawdown


£75 + VAT

Annual income drawdown administration charge to age 75 (1)


£75 p.a. + VAT

So its £180 to set up the drawdown, and then £90 per year admin. Over 10 years, assuming no review of income needed, thats £1080, call it 1% of a 100K pot

Seems harsh??

Thats more than HL
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Joe Soap
Posted: 19 February 2012 18:10:10(UTC)
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I too have a SIPP with HL. One set of funds is in draw down at 0% the other set is not in draw down but will have to be soon, I think. I never realised HL will continue to keep the SIPP fund "baskets"separate when they are both in draw down? This isn't ethical, creating seemingly false demarcations in order to maximise 3 yearly review fees? (Both fund baskets have about £50k in so the £75 every three years fee x 2 isn't exactly a bargain.)
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banjofred
Posted: 19 February 2012 18:24:42(UTC)
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I have a very long email confirming this Joe, they say the government wont let them do otherwise (ha ha)

So you pay £90 every three years on EACH account and they CANT be merged.

i have told them I am off, but looking around some of the others are even worse!!!!!!!

The last hope is bestinvest, but they seem ot have some sort of £100 charge lurking at the bottom. i have emailed ot ask about that.

Get on to HL and raise the roof Joe, its the only way they will listen.

You situation is very close to mine, so you are going to be paying out 0.55% of your fund.
They have already had half a percent commission, which is not rebated to you in a sipp (it is in other sipps)and only paying 0.10% on Cash (or less) when others paying 0.25% on cash.

All in all a nice little earner, but of course i bet your magic 150 funds have grown so much in the last year that you are not bothered?????

Good luck let me know how you get on
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Joe Soap on 19/02/2012(UTC)
Joe Soap
Posted: 19 February 2012 18:29:06(UTC)
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Thanks, even worse I just remembered I also have a very small SIPP fund basket that used to be a protected rights pot from a previous employer. This holds the grand sum of £6000 in it. From what you say, it seems they'll charge me £75 each 3 years to access this too?

Taken from BestInvest SIPP charges literature page 8 of 8 - (Doesn't look quite so attractive now does it when you look at what you pay to simply draw an income?)

SIPP annual fees

Annual administration fee FREE - -
Annual child SIPP administration fee FREE - -
Annual administration fee for plan in drawdown FREE - -
SIPP set-up fee FREE - -

Benefits and payment fees

Set-up fee for income drawdown FREE - -
Set-up fee for flexible drawdown £150
Calculation of income limits £100
Annual charge for income payments (after tax-free cash) £100 - -
Ad hoc income payments £25
Alteration of payment amount or frequency £25
Trivial payment charge £150
Annuity purchase through Bestinvest FREE - -
Annuity purchase (external) £150
Arranging death benefits - At cost
Ad hoc illustrations £10

And the same info from HL -

HL SIPP

Set-up: NO CHARGE
Contributions: NO CHARGE
Transfers in:* NO CHARGE
Inactivity charge: NO CHARGE

Income draw down

Starting drawdown: NO CHARGE
Each GAD calculation: £75 + VAT
Regular income payments: NO CHARGE
Alter payment amount/frequency: £10 + VAT
Ad hoc payments: £25 + VAT

There's no free lunches in the SIPP industry! My conclusion is, much of a much-ness between BI and HL.
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Guest on 27/02/2012(UTC)
banjofred
Posted: 20 February 2012 05:49:40(UTC)
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Joe

if you ensure that all of your accounts do take drawdown on the same date HL might charge one fee

i am working on this
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chazza
Posted: 20 February 2012 09:26:05(UTC)
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SIPPdeal is certainly a little cheaper than HL for dealing and, in my experience, efficient and reliable. It was A LOT cheaper until HL reduced their dealing charges.

Nothing is entirely transparent or presented in an industry-standard form, but SIPPdeal's charges on drawdown do now seem to be higher than HL's and, for most, this will make a lot more difference than the deaing charges:

SIPPdeal's charges
If you set up an income drawdown pension, including paying any lump sum benefits £150 + VAT
If you designate additional funds or request a review of income levels under income drawdown £75 + VAT
Annual income drawdown administration charge to age 75 £75 p.a. + VAT
Annual income drawdown administration charge from age 75 £250 p.a. + VAT
If you transfer out to another UK pension scheme £75 + VAT
If you register for flexible drawdown pension (Applies only on initial set up of flexible drawdown entitlement. This fee is separate, and where relevant in addition, to income drawdown fees.) £75 + VAT
If you close your SIPP through flexible drawdown or trivial commutation £75 + VAT

So, to set up flexible drawdown with SIPPdeal, it will cost £225 + VAT, and then £75 + VAT a year thereafter.
So, over 5 years, SIPPdeal will cost at least £720. Not at all cheap.
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Business Decathlete on 20/02/2012(UTC)
chazza
Posted: 20 February 2012 10:41:06(UTC)
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What I forgot to say, however, is that SIPPdeal will charge you nothing for holding shares in a SIPP, whereas HL will charge 0.5% p.a. of their value, capped at £200 p.a.
So, it would seem that, if you hold a SIPP consisting only of shares, SIPPdeal will work out cheaper overall, despite their high admin charges for drawdown.
If, however, you only want to hold funds that pay HL a trail commission, then HL will be cheaper.
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Tom Wilcox-Jones
Posted: 20 February 2012 13:28:53(UTC)
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Joined: 20/02/2012(UTC)
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Sippdeal is £180 to arrange a new drawdown plan, cheap!

Then £90 per annum to adminsiter the plan, which is again very cheap, 0.09% of a £100k pot!

There is no such thing as a free lunch!
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sgjhaghsdg
Posted: 20 February 2012 17:44:54(UTC)
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I'm guessing this split is due to protected rights. These go away in (I think!) April, so pots can be merged after that.

The £25+vat for a BestInvest SIPP applies if you hold anything that doesn't give them a kick-back. This is Vanguard trackers, shares, ETFs, etc., but once you hold anything that qualifies for the custody fee, that covers everything. I was going to go with HL, but hated their £2 per tracker fee, and prefer the BestInvest "one fee for everything".

I hold a complex mix of Vanguard trackers, equities including ITs, ETFs and REITs, etc. and pay £30 a quarter for my SIPP.

Note that BestInvest don't (yet) let you hold individual bonds or gilts.
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banjofred
Posted: 20 February 2012 18:20:09(UTC)
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apparently you cant merge, even if yu try to time the drawdown

protected or other no difference

Sippdeal annual charge higher than HL

Bestinvest looks ok but i wonder abut the valuation charges etc at the bottom

I may take the 25% and ue that for shares in an isa, and do funds in the sipp?

I wasnt aware of the 0.5% charge, will have to read up on it

The upshot is you are going to pay. No free lunches in this game it seems

New concern is if the robber barons cancel the 25% tax free allowance and tax it on march 20th ????

Its obvious they are drooling over the higher rate taxpayers, h o p e f u l l y they will get a lot of tory eachache - i cant see the cons voters going for this...

What do you think, shall i grab the money and run?

If you are not near retirement you can see the rocky road ahead- they are going to increasingly bleed us dr - and thats before Ed Balls gets back in !!!!!!
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Colin Edy
Posted: 20 February 2012 18:28:13(UTC)
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I worked for Gerrard which was taken over by Barclays in 2003. When I retired in 2006 I decided to have my SIPP managed by Barclays. I thought as an ex employee I would get favourable terms which I soon found out was pretty stupid thinking. After charging quite a hefty fee they then charged me approx. £%,500 pa for Discretionary Management and managed to reduce the value of my SIPP by 50% in two years. Yes markets were bad during this period but they underperformed their own benchmark by a considerable margin.In order to improve my position I went Execuion Only service but was still charged approx £1,000 pa for a very poor service. I moved last year to Hargreaves Lansdown and have never regretted it. Their service is excellent and advice given when necessary and on line valuation each and every day. They may not be the cheapest but, in my opinion they are the best for looking after your SIPP on an Execution Only Basis.
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Jack Tarr on 21/02/2012(UTC)
EA
Posted: 21 February 2012 14:05:06(UTC)
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Hi, I just want to clear something up having read the above comments.

A SIPP is segmented into 1000 segments (I like to think of it as a pie chart), if the SIPP is worth £10,000.00 each segment is worth £10. A client may not want to go into full drawdown, they may just wish to crystallise 100 segments i.e. £1000.00, calculations would be done based on this and then set for three years, making the review date three years from then. Six months later the client may wish to do the same creating a second plan or 'basket'. The funds to not have to be kept separately although they do have to be reviewed separately and unfortunately this is a HMRC requirement.

Its worth recognising the additional cost in administration with many providers.

In my opinion, SIPPdeal and HL are the cheapest but depends on your situation.
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Knowledgable insider
Posted: 22 February 2012 01:08:07(UTC)
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My goodness....i've never read so much hot air about nothing.....did any of you guys work for free? maybe you did and thats why you have to penny pinch now. The fact is nobody is going to give you what you want which is something for nothing so get used to it and accept a fair price for a service that you clearly need otherwise you would be doing it yourselves!
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sgjhaghsdg
Posted: 22 February 2012 08:08:37(UTC)
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@ "knowledgeable" insider - I suggest you read "The millionaire next door" if you want to understand how high net worth individuals get to be that way and how they choose to spend their accumulated wealth.

Sadly, both ISAs and SIPPs require the use of platforms to provide the tax wrapper, so they have to engage with the financial services industry. Trust me, if they didn't, they'd handle everything with the same ruthless efficiency as with their unwrapped investments.

I once paid an IFA a commission to invest some money on my behalf. It's a mistake that I now regret and won't be repeating.
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EA
Posted: 22 February 2012 11:25:58(UTC)
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Knowledgeable insider (??), Im surprised you have wasted your time in commenting on all this 'hot air'.

It makes financial sense to shop around, with everything, especially your pension. There is little point in throwing money down the drain.

Those who choose not to shop around not only have more money than sense but are also partially to blame for excessive charges and overly priced products.
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sgjhaghsdg on 27/02/2012(UTC)
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