If pension investment choice is important to you then a self-invested personal pension (SIPP) might be of interest. Unlike stakeholder pensions, which are usually limited to a handful of investment funds, SIPPs allow you hold eligible investments from across the marketplace.
The Sippdeal e-sipp provides access to most eligible shares, gilts, corporate bonds, ETFs and investment trusts, as well as around 1,800 funds, which should prove ample choice for most investors. The bottom line is therefore charges.
There are no fees to open an e-sipp nor any annual administration fees, plus you can stop and start contributions as you wish without penalty.
When you buy investments within the e-sipp you’ll pay a fixed £9.95 dealing fee for online deals, rising to £29.95 if you prefer to deal by phone. The online dealing fee is competitive for shares, but unlike most competitors it applies to funds too, which is disappointing. The dealing fee also makes regular monthly contributions uneconomic unless you’re investing upwards of £1,000.
Aside from the £9.95 dealing fee the initial charge on most funds is zero, although Sippdeal pockets any trail commission meaning you’ll pay standard annual fund charges.
If you want to hold cash in your pension you’ll need to use the provided SIPP cash account, which (at the time of writing) pays miserly interest rates of between 0.05% - 0.10%. Profitable for Sippdeal but not customers!
When the time comes to buy an annuity you’ll be charged £125* or, if you choose to draw an income instead (i.e. take an unsecured pension) you’ll pay £150* initially and £75* annually, plus a further £75* every time you review income levels. Transferring the pension to another provider will set you back £75* plus £20 per holding unless first converted to cash (* Plus VAT).
All in all the charges are reasonable versus competitors if you invest lump sums. It’s not the cheapest for funds due to the extra dealing charge, but if you’re contributing thousands of pounds and hold shares too it’s unlikely to be a deal breaker.
The Sippdeal e-sipp is a good value low cost SIPP and an excellent choice if you don’t wish to contribute monthly, hold cash or only invest in funds. If the latter then the Hargreaves Lansdown Vantage SIPP is likely to prove cheaper, while Interactive Investor will probably be better value for regular share investing despite an annual SIPP fee.
Read the full review at http://www.candidmoney.com/candidreviews/review19.aspx
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