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AJ Bell Youinvest e-sipp

Pension (SIPP)
Published 17 March 2010
Helpful? 66
Open Quote 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.End Quote
Thumbs Up
  • Excellent value for holding shares, fixed interest, ETFs and investment trusts
  • Wide investment choice
  • Fund initial charges mostly nil with some partial trail commission rebates
Thumbs Down
  • Dealing fee not economic for sub £1,000 monthly contributions
  • Not the best value for funds (as dealing fee applies)
  • Awful cash interest rates
  • No trail commission rebates
Candid Rating
4.4
Candid Charges
Initial/Setup

Nil

Annual/Ongoing

Nil

Exit/Redemption

£75 + VAT

Other

Dealing fees £9.95 online, £29.95 telephone. £125 + VAT annuity purchase. Check provider for others.

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, investment trusts, covered warrants and PIBS 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. Sippdeal gives some trail commission on certain funds, which is good, but on many it's between 0 - 0.25% so it's worth checking whether you'll get any benefit for the funds you want to buy.

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 (although the small annual rebates are welcome), 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 for smaller amounts, while Alliance Trust Savings will probably be better value for larger sums thanks to very attractive trail commission rebates.

Web Link: http://www.sippdeal.co.uk

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