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Which SIPP for funds and shares?

Retirement | SIPP Helpful? 5

Asked by bucksfizz, submitted 26 January 2012.

Open Quote I am 63 years old, retired with a generous company pension. I also have an additional small pension fund in a SIPP with James Hay which is currently in cash. I want to take the 25% lump sum before the end of this tax year and then invest the balance in shares and possibly a high income fund like Neil Woodfords.

James Hay's charges seem very high for my needs and I'm considering switching to Bestinvest. Can you see any downsides in this?

Or can you reccomend any other low cost SIPP providers please. I do not intend to use income drawdown from the smaller pension at the moment I will just leave it (hopefully!) to accumulate.
End Quote

Answered by Justin on 06 September 2012

Afraid my reply is a bit late, but since asking your question I've put together a low cost SIPP comparison you might find helpful.

If you plan to only hold commission paying funds then the Bestinvest SIPP is a reasonable deal for smaller sums thanks to modest trail commission rebates (typically around 0.15%-0.25%). However cash rates are low (a common problem with low cost SIPPs) and a £120 annual SIPP fee will kick in if you hold non-commission paying investments such as shares, although the £7.50 share dealing fee on pension funds above £50,000 is good for active traders.

The James Hay iSIPP charges £180 a year and a £15 share dealing fee, but gives more generous fund rebates than Bestinvest, so it's swings and roundabouts depending on exactly how you invest the pension fund.

Interactive Investor and Alliance Trust Savings generally give the highest annual fund rebates, but charge fund dealing fees on top of their annual SIPP fees. They'll potentially be the best value if you hold more in funds than shares.

If you'll mostly hold shares then SIppdeal is well worth considering. There's no annual SIPP charge, just a £9.95 dealing fee for all investments. Their fund rebates are stingy, but this is less of an issue if you predominantly invest in shares and the lack of annual SIPP fee is helpful for smaller sums.

Please note this answer does not constitute a recommendation or financial advice and should not be relied upon when making specific investment or other financial decisions. You should always undertake your own research into whether a product or service is appropriate for your needs and, if necessary, use a qualified professional adviser.

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