Be great if Freetrade offered SIPPs. I am currently looking to move one of my Defined Contribution pensions to a SIPP. Some of the fees these platforms charge on SIPPs are eye-watering. As @Danielb1642 said, there is definitely an open goal here.
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It looks like SIPPs are 3-6 months away. Any idea if this will include transfers?
I have no idea what is involved in transferring SIPPs�
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ooh, hadnât noticed this. I would want to transfer I think so hoping they look at doing that, even of they have to do it manually.
I should preface this with a note that Iâm no expert and my only qualification is having a SIPP with HL, hopefully others who know more will jump in and advise a little better.
You can merge your previous pensions into a SIPP - I did it with a few old company pensions as they were trivial and annoying to manage - merged them into my SIPP (held with HL). If you have a lot of money in the pensions you should seek financial advice - there are advantages sometimes to company pensions that you wouldnât want to lose, so you may not want to merge them into one just for ease of management. If they contain trivial amounts it might be worth merging just for clarity/ease of tracking.
Yes your employer can contribute to a SIPP, not sure if all employers would agree to that though (or whether they are obliged to), as usually they have their own scheme that theyâll contribute. If you can get employer contributions they make a huge difference obviously so worth going whatever route you need to in order to get them.
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You donât need to do anything right now. Itâs fine to keep your workplace pensions separate when you switch jobs.
Consolidating can simplify things though and give you more control and visibility on performance and fees. Find a platform you like (e.g. Pensionbee, Fidelity, HL, AJ Bell, Freetrade soon etc.) based on fees and what funds/shares/ETFs you want in your pension and the element of control you want. Then you just give that new platform the details of your old pensions - name, account number if you know it, name of the employer - and they handle the rest. Then a few weeks later youâll have a pot of money to invest in your chosen option.
Your current employer may be willing to pay their contributions directly into your SIPP. More likely though theyâll only pay into their normal workplace pension that all staff are enrolled in. Itâs easier that way.
So most of the time youâll have two pensions - a SIPP and a workplace pension with your current employer. Each time you leave a job you can consolidate the workplace one into the SIPP. My workplace pension is with Peopleâs Pension who allow one transfer a year to a SIPP so I can invest that money more flexibly. But that still means I have two pension pots as my boss only pays into that one.
An important thing to keep in mind when doing this are the fees attached. Your old workplace pensions may have big exit fees. These are under review by the FCA, but for now you need to be aware. Some platforms will offer to pay them for you if you switch to them.
Finally, if youâve ever had a Defined Benefit pension (not many of these are left but if youâve ever had a public sector job or worked in a formerly nationalised business you might have one) you should be careful about transferring money from that - you may end up worse off.
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@101 the simplest way would be to transfer all of your existing ones to one new pension, probably a SIPP in your name. Employer matches usually only work with workplace pensions - ie the one managed by you/your gfâs employer. (Obviously maximise the employer match because itâs free money for futureyou, but todayyou knew that already.)
But.
Your old pensions (whether theyâre defined benefit or not) may have âspecial featuresâ, which might be bad like chunky exit costs or good like guarantee future annuity rates. So you need to find out about those before you decide whether to transfer or not - as @kenny and @john said it might be worth staying put to avoid losing certain benefits. Annoyingly, special features are not always detailed in your pension statement, so you have to ask your provider.
You could have a pension review with an IFA (if you have a defined benefit pension of over X - I forget how much, sorry - youâll have to do this before transferring). The last IFA quote I got to do this was ÂŁ900.
But I didnât want to pay the ÂŁ900 so instead I asked my existing pension provider these questions:
- Can I transfer my pension out of YourPensionCo? (There can be restrictions on which pensions you can transfer.)
- What is the âtransfer valueâ of my pension? (If itâs the same as your pot value, itâs unlikely youâll be charged a fee when you transfer.)
- Are there any disadvantages for me if I transfer?
- What fees would I have to pay if I transfer?
- Will I lose any âspecial featuresâ?, eg guaranteed annuity rate, protected tax-free cash, protected low pension age guarantees, waiver of contribution, life assurance benefits, accidental death benefit in addition to death payment, any self-investment option, etc.
- Will I lose any rights related to protected tax-free lump sums?
The answers will help you work out whether transferring is a good idea or not. If it is, a co like PensionBee can help make it happen, but the forms are very doable for an ex-pensions advisor 
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This is on the roadmap.
In the medium term timescale at the moment.
I wonder what the pricing for SIPP going to be! I wonder if that has been considered yet, kind of like ISA pricing which has been pre announced before charging it.
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Yes, excited to see it coming soon.
No idea what pricing is but I know Iâm moving mine to freetrade when it comes out!
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Was there an answer to whether Freetrade SIPPs will include transfers in out of the gate?
I donât want to wait 3 to 6 months only to find out itâs another 6 to 12 months for SIPP transfers!
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I didnât see an answer to the transfer question. Applies to me too. Last roadmap was August with 3 - 6 month timeframe. Wonder if thatâs still the plan?
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Iâve got a SIPP waiting to transfer to either Vanguard or FreetradeâŠwhoâs going to win the race!?
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Vanguard most likely as theyâve been working on it. Iâm not aware of Freetrade having done anything on it yet, they have other priorities.
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I just received an email from Vanguard about their SIPP.
Launch in early 2020. It looks pretty compelling.
- A standard annual account fee of just 0.15%, capped at ÂŁ375 a year.
- The account fee and cap apply across all an individualâs holdings on Vanguard Investor (SIPP, ISA, general account).
- Clear pricing â only the account fee plus fund fees and transaction costs â nothing else.
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HL for a comparison are 0.45%. So if you take ÂŁ375 and divide it by 0.45 youâd need a pension of ÂŁ83,333 to just break even. Given the legal protection is what 85k - they are being very clever as people open various pots with different organizationsâŠ
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Only if you have just a SIPP in vanguard. The fee is cheaper if you have more than one product as your now spreading it across them.
(HL have various fees up to ÂŁ2 million)
As for the FSCS protection, are people really splitting up their pensions into individual 85k pots everywhere? I donât think they are⊠so I donât think this is a consideration at all.
Me - thatâs why I currently have two providers, although my ÂŁ85k pots are made up of SIPP and ISAs.
If one provider falls over, Iâll still have the other. Another form of diversification.
ÂŁ83,333 in vanguard would cost you ÂŁ125, there is no break even
That seems like it would get expensive, and complicated to manage to ensure your not over 85k per institution. I wonder if youâd run out of platforms eventually?
Not to mention you would also be limited in what funds you can invest in to keep them covered under FSCS protection. (Most ETFs are out of the question for example)
So while it may be something you do, I still donât think it was a consideration at all for vanguard.
Oops yep. The cap is 375 not the annual costâŠ
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