In the back
types of pension saver, from novice
through to experienced investor, as
they often have different needs.
What we can’t do is look forensically
into what to actually invest in, but we
will look at asset classes more generally,
especially in light of Vanguard’s up-
and-coming direct pension offering.
Also, on visiting a friend recently,
I was impressed by the thorough
research he conducted to create his
investment trust-only SIPP on AJ
Bell’s Youinvest platform.
He has created a spreadsheet on his
portfolio away from his platform to
analyse his asset allocation, charges
and performance.
The most important point
is to spend time looking at
what you currently have
invested, which means
rooting out old pension
statements of current and
past employers
He almost lost me in the detail and
it made me wonder about novices
who are not making any retirement
provision simply because they think
investing is that complicated.
So, I thought we could look at
“falling off a log” easy investment
solutions now available for people
who want to start their own pensions,
TRADITIONAL INVESTMENT PLATFORM SIPP OFFERINGS
Platform
SIPP admin fee
Dealing costs (funds)
AJ Bell Youinvest FREE
£1.50
Platform fee
0.25%
Barclays Smart Investor £150 £3 0.20%
Charles Stanley Direct £120 £0 0.35%
Fidelity Personal Investing FREE £0 0.35%
Hargreaves Lansdown FREE £0 0.45%
interactive investor* £120
£7.99
£9.99**
Most platforms have reduced charges for portfolios over £250,000
*Interactive Investor has a range of fixed-fee models – the lowest-cost one is used here
**Includes trading credits against monthly fee
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up to the more advanced strategies
for more experienced investors,
paying particular attention to costs,
simplicity and capability.
Back to basics
So, is it really worth setting up a
SIPP? That depends on your existing
pension arrangements, but unless
you have a generous company
scheme, you should consider it.
The most important point is to
spend time looking at what you
currently have invested, which
means rooting out old pension
statements of current and past
employers. If you are self-employed,
the onus is on you to set up your
own retirement fund. Too many
people who are self-employed have
confessed a pension was a low
priority when running their business
and are now suffering as a result.
Learn from their mistakes!
You may feel confident already
you will have enough saved for
retirement, which is fine, but as a
rule of thumb you should aim for
£500,000 to £1m in your pension.
If you think your current employer
scheme will bring you up short, then
the best way to pump-prime a new
SIPP is to hunt out any dormant
pensions you have from past
employers and transfer them in. It is
relatively easy to open a new SIPP on
most well-known platforms, but pick
a provider with the right charging
structure to suit your needs.
There are still a few platforms
charging pretty hefty SIPP
administration fees that you will
need to factor in to the overall cost of
managing your investments.
Once your SIPP account is open,
there is a straightforward process
to authorise the platform to move
the holdings from your old pension
providers into your account and
under your control. Then you can
see what you’ve got and decide if the
investments are in the right funds
or whether you want to sell those
holdings and invest in other products
to best-suit your needs.
Traditionally, this has been
the way to go about obtaining
a complete overview of your
retirement investments, but there
are new methods of achieving the
same outcome that could be more
appealing to the novice investor.
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