The Sipp with Freetrade may make more sense for some than others but thereās no question itās a competitive offering. For those with smaller pension pots - such as myself it is likely still cheaper to stick with current providers (in terms of pure cost - my current pension doesnāt let me have the same freedom of choosing my investments in the detail a Sipp gives you).
But if you have a larger pit with the kind of percentage you are talking about - then Freetradeās Sipp will save a lot of money - anything over 20k in the pot at .65% would be a saving - and if the pot was 100k youād save about 530 a year if my maths is correct.
I will still consider switching before it was empirically cheaper though as I would like the freedom to invest it the way I want, but probably not until my pot is much closer to 20k.
As I said it wonāt necessarily be cheaper for every single person. What you have suggested may make it great value for you and myself (I have -a similar amount in my pension) in the short term - but would be much harder for Freetrade to become a viable longer term profit making business I imagine. 17 a month for Sipp, ISA and plus is pretty good and as plus gets much better it will be quite compelling Iām sure.
No I think the confusion is what weāre basing the contribution on. Itās 20% of the gross amount but 25% of the net pay that you would put in.
I.e. by putting Ā£8k in a SIPP, the top up (Ā£2k) is 25% of the contribution but 20% of the gross (what you earned before tax).
Will we claim the extra 20/25% through Freetrade or notify HMRC and then have them pay to Freetrade? Itād be nice if there was an automated process / simple workflow Freetrade could put together to help customers with this.
I know many workplace pensions take care of this aspect automatically, but maybe thatās just because they have visibility of tax status.
ā¦ Id hope Freetrade would automatically. Im not moving my SIPP to a company that cant even claim my tax relief. Are there SIPPs where you have to do this yourself? Vanguard just does this for me every time i deposit money.
SIPPs do as well. I dont know of any where you have to claim the tax every time you deposit money.
In my experience the 20% standard is collected automatically, if however you are a higher rate tax payer you usually have to claim the rest (over 20%) yourself.
This was my question, I know the first 20% is mostly automatic but my work does the extra 20% (or 25% if you are lucky enough) automatically as well so Iāve never had to do it.
Itād be nice if Freetrade could simplify the process as much as possible or provide a simple guide if not. I imagine a lot of the Freetrade demographic are new to this.
Ok right, guess there is nothing that can be done then. Not sure where I got the idea that there was a way to claim without doing a full self assessment.
I wasnāt sure I was going to do a transfer but just worked out that I will save Ā£4 a month on fees (and rising as I continue to invest) if I transfer my HL SIPP so hereās hoping for a smooth transfer and looking forward to my free share!