SIPP for dummies?

One might ask why you want to start a SIPP if you don't know what they are.

Rob Graham

Also, many companys do not allow execution only SIPPs and you will have to go through an IFA, who should also explain what they are and if they are the best thing for you.

In message , K writes

Rathbones.

One of the main reasons for using a SIPP can be a low charging structure - especially for cash investments - around 500 p.a. But any additional services would be charged for.

Google should throw up quite a few SIPP providers. Otherwise an IFA might be a good option - although I would probably stay away from any Insurance company options, as the charges & penalties can be heavy.

I would add that unless:

a) You wish to use pension funds to invest directly in property b) wish to invest directly in shares or other securities c) You wish to transfer in a substantial existing pension fund

what is the point in bothering with a SIPP ?

The charges under a SIPP are likely to much higher than an ordinary Personal Pension, and most Personal Pensions have a decent range of investment funds these days.

I know there is currently a lot of hype that 'everybody should have a SIPP', but I just don't buy this line......

In message , sylvian stone writes

Amend your quote to add '...provided one has a fund of at least GBP100K' to your line and you'd be getting near the truth.

Fair comment. They were a good idea before the advent of CAT stakeholders that limited charges to 1% pa.

I use SIPPdeal (£100 initial, no annual charge, reasonable dealing charges) because I invest directly following a high yield / value strategy

Another good value for money provider is the Alliance Trust - no initial or annual charges, just reasonable dealing charges, in fact all of there products are good value for money and are a good starting point from which to evaluate other companies offerings.

There's a good pensions forum here and SIPP forum here

Daytona

In message , JF writes

I couldnt see anything on their site that explained SIPPs 'well'. Can you post the URL you were referring too?

I was looking at

A big thank you to all for your advice. Now I know a lot more about SIPPs, so I'm closer to taking an informed decision. Thanks again.

Are you saying that CAT is good or bad?

(I realise that the answer depend on the sophistication of the investor and/or the investement timescale.)

Certainly, in the CTF arena, the CAT-ness of some products makes them worse than the non-CAT alternatives - if you give up the possibility of lower monthly contributions, then you can benefit from no (external) annual charges.

In some cases you may want the percieved benefit in 'active management' that an annual charge brings, but in others the compound effect of even a low %age charge could be nasty.

rgds, Alan

I think that point was kind of made earlier by somebody else.

If you are paying, say, £100 into a pension plan, you are going to be proportionately hammered on charges in most SIPPs compared to a single-charged personal pension.

There must be a cross-over point where a SIPP becomes more competitive than a generic pension [even assuming you accrue premiums to several months in cash, then invest to save transaction charges]. Has anybody ever tried to work this out ? Figures such as £100,000 are bandied about, but has anybody ever sat down and worked it out ?

That is assuming that you make the investment decisions yourself. Most advisors that I have met would advise that you invest the pension assets with a discretionary fund manager, or invest via a Trustee Investment Plan - which means yet another layer of charges.

SS.

There are a number of low-cost SIPPs, like those run by Sippdeal and Alliance Trust and Savings. Apart from a minimal set-up fee and an annual statutory statement, you only incur charges when you deal.