Why does PH have an obsession with SIPPs?
Discussion
I work in financial services and I sometimes visit the Finance section on PH, but I rarely post here for various reasons.
One thing which always amazes me here is the PH obsession with SIPPs. Why is that?
There are various types of pension products and in fact there are various flavours of SIPPs. Some will be appropriate for some people, but not others.
Costs vary too and if someone doesn't need the full SIPP flexibility and functionality then why not invest in, for example, an Individual Personal Pension which invests in funds or collectives? Why pay for a full SIPP when you'd never use it, or when you can upgrade to a SIPP in X years when you do need it? Or save in an ISA if there's unused allowance?
It's a bit like someone saying "I need a car to go to Tesco" and people calling "get a Porsche 911"!
Whenever any poster askes about retirement planning the majority of responses are "you need a SIPP!". Why? I know there are some regulated financial advisers who post here but most posters aren't?
I'm just curious
One thing which always amazes me here is the PH obsession with SIPPs. Why is that?
There are various types of pension products and in fact there are various flavours of SIPPs. Some will be appropriate for some people, but not others.
Costs vary too and if someone doesn't need the full SIPP flexibility and functionality then why not invest in, for example, an Individual Personal Pension which invests in funds or collectives? Why pay for a full SIPP when you'd never use it, or when you can upgrade to a SIPP in X years when you do need it? Or save in an ISA if there's unused allowance?
It's a bit like someone saying "I need a car to go to Tesco" and people calling "get a Porsche 911"!
Whenever any poster askes about retirement planning the majority of responses are "you need a SIPP!". Why? I know there are some regulated financial advisers who post here but most posters aren't?
I'm just curious
It's almost always the cheap end SIPP's being suggested. Sippdeal and Hargreaves Lansdown.
Whether or not they remain cheap for much longer with the FCA trying to put them out of business via the back door is a different matter though ....
Whether or not they remain cheap for much longer with the FCA trying to put them out of business via the back door is a different matter though ....
Edited by PurpleMoonlight on Saturday 12th April 14:40
PurpleMoonlight said:
It's almost always the cheap end SIPP's being suggested. Sippdeal and Hargreaves Lansdown.
Whether or not they remain cheap for much longer with the FCA trying to put them out of business via the back door is a different matter though ....
You can get some (probably most) PPs cheaper than SIPPs, if price is a factor.Whether or not they remain cheap for much longer with the FCA trying to put them out of business via the back door is a different matter though ....
Edited by PurpleMoonlight on Saturday 12th April 14:40
My point is that many people take SIPPs out and then only invest in funds - which you can do cheaper in a PP. So they're often paying for functionality and flexibility that they just don't need. If that was the result of a recomendation by an IFA, he'd be pulled up for it by the regulator.
Simpo Two said:
I moved to a SIPP last year because I wanted to get out of an inflexible Skandia pension and my (then) IFA recommended a SIPP. IIRC the fee is £180pa, which sounded very cheap. No idea how often they stir the pot for that though.
What do you mean "stir the pot"? Review your investment strategy? Rebalance? £180 p.a. for a SIPP is probably on the cheaper end.Edinburger said:
What do you mean "stir the pot"? Review your investment strategy? Rebalance? £180 p.a. for a SIPP is probably on the cheaper end.
Stir the pot - do something useful.They won't be doing any 'IFA-ing'; I think it is £180 to keep it in their 'wrapper'. I presume somebody is doing something with the funds... it made good sense last year when I moved but I've forgotten it now. That's how I am with finance - load up my brain, assess the facts, make a decision - then clear the space for something more interesting.
NB: I don't pay in any more so it's just a lump of money.
Edited by Simpo Two on Saturday 12th April 17:31
Edinburger said:
I work in financial services and I sometimes visit the Finance section on PH, but I rarely post here for various reasons.
One thing which always amazes me here is the PH obsession with SIPPs. Why is that?
There are various types of pension products and in fact there are various flavours of SIPPs. Some will be appropriate for some people, but not others.
Costs vary too and if someone doesn't need the full SIPP flexibility and functionality then why not invest in, for example, an Individual Personal Pension which invests in funds or collectives? Why pay for a full SIPP when you'd never use it, or when you can upgrade to a SIPP in X years when you do need it? Or save in an ISA if there's unused allowance?
It's a bit like someone saying "I need a car to go to Tesco" and people calling "get a Porsche 911"!
Whenever any poster askes about retirement planning the majority of responses are "you need a SIPP!". Why? I know there are some regulated financial advisers who post here but most posters aren't?
I'm just curious
same as a 'roid head tradesman becomes a 'powerfully built company director', One thing which always amazes me here is the PH obsession with SIPPs. Why is that?
There are various types of pension products and in fact there are various flavours of SIPPs. Some will be appropriate for some people, but not others.
Costs vary too and if someone doesn't need the full SIPP flexibility and functionality then why not invest in, for example, an Individual Personal Pension which invests in funds or collectives? Why pay for a full SIPP when you'd never use it, or when you can upgrade to a SIPP in X years when you do need it? Or save in an ISA if there's unused allowance?
It's a bit like someone saying "I need a car to go to Tesco" and people calling "get a Porsche 911"!
Whenever any poster askes about retirement planning the majority of responses are "you need a SIPP!". Why? I know there are some regulated financial advisers who post here but most posters aren't?
I'm just curious
same as a BTL and 'property development' were the keys to all riches and nothing at all to blame for the ridiculous state of the property market
it also fits with the PH stereotype of
- self employed or contractor
- borderline socipopath in denial , believes they are a Libertarian and/or 'kipper
- belief that the politico-industrial- military complex is out to get them
mph1977 said:
same as a 'roid head tradesman becomes a 'powerfully built company director',
same as a BTL and 'property development' were the keys to all riches and nothing at all to blame for the ridiculous state of the property market
it also fits with the PH stereotype of
- self employed or contractor
- borderline socipopath in denial , believes they are a Libertarian and/or 'kipper
- belief that the politico-industrial- military complex is out to get them
same as a BTL and 'property development' were the keys to all riches and nothing at all to blame for the ridiculous state of the property market
it also fits with the PH stereotype of
- self employed or contractor
- borderline socipopath in denial , believes they are a Libertarian and/or 'kipper
- belief that the politico-industrial- military complex is out to get them
Edinburger said:
I work in financial services and I sometimes visit the Finance section on PH, but I rarely post here for various reasons.
One thing which always amazes me here is the PH obsession with SIPPs. Why is that?
There are various types of pension products and in fact there are various flavours of SIPPs. Some will be appropriate for some people, but not others.
Costs vary too and if someone doesn't need the full SIPP flexibility and functionality then why not invest in, for example, an Individual Personal Pension which invests in funds or collectives? Why pay for a full SIPP when you'd never use it, or when you can upgrade to a SIPP in X years when you do need it? Or save in an ISA if there's unused allowance?
It's a bit like someone saying "I need a car to go to Tesco" and people calling "get a Porsche 911"!
Whenever any poster askes about retirement planning the majority of responses are "you need a SIPP!". Why? I know there are some regulated financial advisers who post here but most posters aren't?
I'm just curious
I thought sipps are for peeps earning c100k and saving say 20, 30, 40k in their pension?One thing which always amazes me here is the PH obsession with SIPPs. Why is that?
There are various types of pension products and in fact there are various flavours of SIPPs. Some will be appropriate for some people, but not others.
Costs vary too and if someone doesn't need the full SIPP flexibility and functionality then why not invest in, for example, an Individual Personal Pension which invests in funds or collectives? Why pay for a full SIPP when you'd never use it, or when you can upgrade to a SIPP in X years when you do need it? Or save in an ISA if there's unused allowance?
It's a bit like someone saying "I need a car to go to Tesco" and people calling "get a Porsche 911"!
Whenever any poster askes about retirement planning the majority of responses are "you need a SIPP!". Why? I know there are some regulated financial advisers who post here but most posters aren't?
I'm just curious
so what are the best Individual Personal Pensions out there then?
I went for a SIPP because, being relatively uneducated about pensions, I needed advice or a pension manager and everyone seemed to want chunky fees for their advice or to set it up for me
I opened a SIPP to mirror the holdings within my stocks ISA, which are managed by the usual managers so I researched their holdings and tried to replicate it as best I could
I went for a SIPP because, being relatively uneducated about pensions, I needed advice or a pension manager and everyone seemed to want chunky fees for their advice or to set it up for me
I opened a SIPP to mirror the holdings within my stocks ISA, which are managed by the usual managers so I researched their holdings and tried to replicate it as best I could
Don't forget, everyone on here is taxed at 40 or 45% so, particularly now, pensions are a far better deal than ISAs if you can tie up the money that long.
So then it is a question of self invested or PP in funds managed by someone else.
Since the other main characteristic of PH Company Directors with 40-45% marginal tax rate is their ability to beat the market by "doing research into great companies". Hence a SIPP is the obvious way to maximise their pot while maintaining the control necessary to pick the next Google, Apple and Netflix rather than pay fees to professional fund managers who will underperform.
I use a SIPP to buy trackers and I am only now realising that might not be the cheapest way to do it.
So then it is a question of self invested or PP in funds managed by someone else.
Since the other main characteristic of PH Company Directors with 40-45% marginal tax rate is their ability to beat the market by "doing research into great companies". Hence a SIPP is the obvious way to maximise their pot while maintaining the control necessary to pick the next Google, Apple and Netflix rather than pay fees to professional fund managers who will underperform.
I use a SIPP to buy trackers and I am only now realising that might not be the cheapest way to do it.
walm said:
I use a SIPP to buy trackers and I am only now realising that might not be the cheapest way to do it.
What might be cheaper or better than that? I do the same (HL sipp and passive index trackers mostly) and wonder if there is a 'better' way of doing things.I moved all my pensions into an HL sipp about 4 years ago after realising just how much money my IFA company was creaming off the top of my pension! Compounded up over the 35 years I had left, it was quite eyewatering!
Mellow Matt said:
I've been thinking about opening a SIPP - I can't see a reason not to?
I would just invest in funds, so if I opened a SIPP with Best Invest, I'd be charged 0.3% per year for this. Is there a cheaper way to have a pension and still be able to pick funds...?
I'm in exactly the same situation. I don't necessarily want a SIPP per se, just the cheapest way to have a pension which I can choose the funds in which to invest.I would just invest in funds, so if I opened a SIPP with Best Invest, I'd be charged 0.3% per year for this. Is there a cheaper way to have a pension and still be able to pick funds...?
Any recommendations would be apprectiated!
I started 4 personal pensions for clients today, all four recommendations were different. Which is best depends on your input and what features you require, how much you have and what your other assets/plans are.
I am seeing a client tomorrow who is maxing out her unused annual allowance for the past few years and it's going into very cheap funds to dimply sit there and gather the tax relief for 3 years time. No need for fund management sophistication, uber functionality and expense - rather, focus on drawdown characteristics and good admin from the life company.
Post budget a Higher Rate tax payer might just want the cheapest wrapper before drawdown, or a professional person might want a personal pension to work hand in glove with an investment bond and other investments, which might suggest a platform or Wrap.
If you have a SIPP and if you like your research, you should have been on top of Lipper these past few weeks. If you have a SIPP and are letting the funds role - fine.. but are you paying for something you don't need? Many personal pensions with decent managed funds or passives can be had for peanuts these days. And getting monkeys if you pay peanuts is so 2005.
I am seeing a client tomorrow who is maxing out her unused annual allowance for the past few years and it's going into very cheap funds to dimply sit there and gather the tax relief for 3 years time. No need for fund management sophistication, uber functionality and expense - rather, focus on drawdown characteristics and good admin from the life company.
Post budget a Higher Rate tax payer might just want the cheapest wrapper before drawdown, or a professional person might want a personal pension to work hand in glove with an investment bond and other investments, which might suggest a platform or Wrap.
If you have a SIPP and if you like your research, you should have been on top of Lipper these past few weeks. If you have a SIPP and are letting the funds role - fine.. but are you paying for something you don't need? Many personal pensions with decent managed funds or passives can be had for peanuts these days. And getting monkeys if you pay peanuts is so 2005.
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