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SIPP Advice


Kurt Barlow

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I need to open a SIPP before the end of the FY to reduce the arse raping I'm getting off HMRC. Just received a tax bill for 5500.

The problem is after working abroad for several years I haven't been able to get investments into Tax free cover (ISAs etc).

Ive bunged everything I can into ISAS last FY and this and also using Mrs B's allowances.

The AVC scheme at work only allows me to put in an extra 300 a month - this would have been the simple option.

Barclays who I currently use haven't got their SIPP set up.

Can anyone recommend a good provider?

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longtomsilver

I’m hearing mixed reviews on Barclays who’ve been porting (disastrously) to a new platform.

We use Hargreaves Lansdown and the service has been good. Charges aren’t the lowest in the market but capped at £200 per annum for stocks/shares. I also hold £35k in a FTSE 250 tracker fund and they take an additional £3 a month from here.

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14 minutes ago, longtomsilver said:

I’m hearing mixed reviews on Barclays who’ve been porting (disastrously) to a new platform.

We use Hargreaves Lansdown and the service has been good. Charges aren’t the lowest in the market but capped at £200 per annum for stocks/shares. I also hold £35k in a FTSE 250 tracker fund and they take an additional £3 a month from here.

I started using barclays a decade ago and found them fine. Tails in nicely with my current account. If you have issues you can actually speak to somebody. Last FY and this year they helped me transfer 35K into ISA's.

I haven't had any issues with the new Smart investor platform.

I will consider HL. Be interesting to see what Frank says - I think he is a SIPP boffin

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  • 1 month later...
On 08/12/2017 at 15:27, Kurt Barlow said:

I started using barclays a decade ago and found them fine. Tails in nicely with my current account. If you have issues you can actually speak to somebody. Last FY and this year they helped me transfer 35K into ISA's.

I haven't had any issues with the new Smart investor platform.

I will consider HL. Be interesting to see what Frank says - I think he is a SIPP boffin

Or mug!

Yes, also Hargreaves Lansdown.  I find them excellent.

Quick example: one of the shares in my SIPP was the subject of a bid last week, they emailed me to say I had a new secure message, I logged in, read the message and could just accept the bid by clicking an icon and saying "I agree". Dead easy.

If you have a defined benfits pension at work you'll need to work out how much this equates to as contributions each year before deducting this from your £40k annual allowance.  It's some complicated formula but roughly 12 - 15 times the annual benefit and maybe err at the high end.  So if your pension will pay out £1,000 a year for a year's contributions then the value of the contributions is £12k - £15k so you have £28k - £25k that you can put into the SIPP.

You make SIPP contributions net of 20% tax so if you want to put in £20k you only actually pay £16k when you pay in (which can be held as cash, you don't have to invest straight away).

The SIPP provider will collect the £4k on your behalf in 2 - 3 months' time and deposit it into your SIPP as cash.

You will need to do a tax return at the year end to get the refund of any higher rate of tax that you pay.  I always quote my HL account number and date of making the SIPP payment so that they can check without coming back to me for the original documentation.

 

If you want to save all your tax and have loads of cash swilling around then VCT contributions are currently tax deductible up to 30% in the year of purchase (were fully deductible but this was capped a few years back) but you are required to pay this back if you sell within five years.  The dividends (which are usually huge, 10% is not unusual but they are usually reducing the asset value so you need to view them differently to normal FTSE 100 dividends) are entrely tax free and don't need to be included on your tax return.  You do need to put the VCT contribution on to get the tax back and again I put date of contribution, VCT name, and reference number if any.

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  • 3 weeks later...
On 1/14/2018 at 11:00, Frank Hovis said:

Or mug!

Yes, also Hargreaves Lansdown.  I find them excellent.

Quick example: one of the shares in my SIPP was the subject of a bid last week, they emailed me to say I had a new secure message, I logged in, read the message and could just accept the bid by clicking an icon and saying "I agree". Dead easy.

If you have a defined benfits pension at work you'll need to work out how much this equates to as contributions each year before deducting this from your £40k annual allowance.  It's some complicated formula but roughly 12 - 15 times the annual benefit and maybe err at the high end.  So if your pension will pay out £1,000 a year for a year's contributions then the value of the contributions is £12k - £15k so you have £28k - £25k that you can put into the SIPP.

You make SIPP contributions net of 20% tax so if you want to put in £20k you only actually pay £16k when you pay in (which can be held as cash, you don't have to invest straight away).

The SIPP provider will collect the £4k on your behalf in 2 - 3 months' time and deposit it into your SIPP as cash.

You will need to do a tax return at the year end to get the refund of any higher rate of tax that you pay.  I always quote my HL account number and date of making the SIPP payment so that they can check without coming back to me for the original documentation.

 

If you want to save all your tax and have loads of cash swilling around then VCT contributions are currently tax deductible up to 30% in the year of purchase (were fully deductible but this was capped a few years back) but you are required to pay this back if you sell within five years.  The dividends (which are usually huge, 10% is not unusual but they are usually reducing the asset value so you need to view them differently to normal FTSE 100 dividends) are entrely tax free and don't need to be included on your tax return.  You do need to put the VCT contribution on to get the tax back and again I put date of contribution, VCT name, and reference number if any.

Cheers Frank. Been without the Netfor 2 weeks hence the delay in replying.

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  • 8 months later...

If anyone out there is in 100% control of their SIPP I would be pleased to receive some opinions.

I have approx £80K sat in a cash SIPP with AJ Bell. It's previously been through a 5 year Zurich share plan which equated to zero growth in the period and has been in cash since. I'm keen to take full control and move it out of an advisor led plan into one where I can make my own decisions. I'm prepared to take some risks with this money as it won't form the primary part of my retirement fund. Crucially I would like to place some of the fund into gold bullion and a lot of SIPP providers won't allow this (AJ Bell included). Just spoken to James Hay Partnership and I was impressed by their professionalism and they will allow investment in gold. There are more SIPP providers out there who deal with bullion (as listed on the bullionvault website) such as Hornbuckle, Pointon York etc but I don't have any real methodology for choosing one over the next (other than I've heard of James Hay!).

Apparently I will need to increase the fund value to over £100,000 to allow my fund to go into the James Hay 'Whole of Market' module. I'm not sure why this is but it's not a problem to increase the sum as I have surplus cash in my business account.

My current intention is to invest the fund broadly as follows: 50% gold, 30% shares, 20% cash. 

For share dealing through the SIPP I need to do some more reading. It looks like I need to appoint a stockbroker for an execution only service. The James Hay site refers to selftrade or stocktrade but they do allude to the use of 3rd party stockbrokers with a £102 charge per annum for this. I have a Hargreaves Lansdown personal share dealing account so may use HL instead.

Anyone used James Hay? If yes, happy or not with the service?

Ta!

 

 

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longtomsilver
22 hours ago, Sasquatch said:

If anyone out there is in 100% control of their SIPP I would be pleased to receive some opinions.

I have approx £80K sat in a cash SIPP with AJ Bell. It's previously been through a 5 year Zurich share plan which equated to zero growth in the period and has been in cash since. I'm keen to take full control and move it out of an advisor led plan into one where I can make my own decisions. I'm prepared to take some risks with this money as it won't form the primary part of my retirement fund. Crucially I would like to place some of the fund into gold bullion and a lot of SIPP providers won't allow this (AJ Bell included). Just spoken to James Hay Partnership and I was impressed by their professionalism and they will allow investment in gold. There are more SIPP providers out there who deal with bullion (as listed on the bullionvault website) such as Hornbuckle, Pointon York etc but I don't have any real methodology for choosing one over the next (other than I've heard of James Hay!).

Apparently I will need to increase the fund value to over £100,000 to allow my fund to go into the James Hay 'Whole of Market' module. I'm not sure why this is but it's not a problem to increase the sum as I have surplus cash in my business account.

My current intention is to invest the fund broadly as follows: 50% gold, 30% shares, 20% cash. 

For share dealing through the SIPP I need to do some more reading. It looks like I need to appoint a stockbroker for an execution only service. The James Hay site refers to selftrade or stocktrade but they do allude to the use of 3rd party stockbrokers with a £102 charge per annum for this. I have a Hargreaves Lansdown personal share dealing account so may use HL instead.

Anyone used James Hay? If yes, happy or not with the service?

Ta!

 

 

You'll lose money sitting on the sidelines holding cash and you'll be setting yourself up for even more disappointment by allocating 70% of your pension wealth into gold/cash...

*Gold has only really held significance for the very wealthy who want to keep assets off the radar when it comes to death(inheritance), divorce(divorce) and debt(bankruptcy) but as an insurance policy against something like hyperinflation it's a ludicrous idea, to put things into  perspective of the 10 most severe hyperinflation events recorded in the past century only two have happened in Europe. A once in 50 year event across 1 of 50 countries (odds 1/2,500).

The FTSE 100 has pulled back and there are some bargains to be had in the FTSE All Share index or you could just put a wedge in a vanguard FTSE 100 tracker yielding 4%+ then average up/down and pick a dozen defensive stock as well. Not a recommendation but I hold (amongst others) HSBA, SLA and SSE which haven't performed well but that makes a purchase now even more compelling.

*Farmland is the new gold standard. Hence the tax breaks given. 

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  • 2 weeks later...
  • 4 weeks later...
On ‎08‎/‎12‎/‎2017 at 13:19, Kurt Barlow said:

I need to open a SIPP before the end of the FY to reduce the arse raping I'm getting off HMRC. Just received a tax bill for 5500.

The problem is after working abroad for several years I haven't been able to get investments into Tax free cover (ISAs etc).

Ive bunged everything I can into ISAS last FY and this and also using Mrs B's allowances.

The AVC scheme at work only allows me to put in an extra 300 a month - this would have been the simple option.

Barclays who I currently use haven't got their SIPP set up.

Can anyone recommend a good provider?

Similar situation.  Going to start a SIPP beginning of 2019.  I'm looking at the fire and forget SIPPs eg Vanguard life strategy's paying from my company account avoiding corporation and dividend tax.

I'm reading that vanguard are going to release their own SIPP product (next month) which should have a low fee and might shake up the big players and their fees.

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sleepwello'nights
20 minutes ago, montecristo said:

Similar situation.  Going to start a SIPP beginning of 2019.  I'm looking at the fire and forget SIPPs eg Vanguard life strategy's paying from my company account avoiding corporation and dividend tax.

I'm reading that vanguard are going to release their own SIPP product (next month) which should have a low fee and might shake up the big players and their fees.

That's of interest. Where did you read about it. I've just had a look on their website and I cant see any mention.

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41 minutes ago, sleepwello'nights said:

That's of interest. Where did you read about it. I've just had a look on their website and I cant see any mention.

https://www.vanguardinvestor.co.uk/investing-explained/investment-account-types#sippform

Bottom of the page I registered my interest there.  

But looks like there is a delay in releasing it in December.

 

https://citywire.co.uk/new-model-adviser/news/vanguard-s-fnz-pension-delay-holds-back-uk-takeover/a1162451

 

 

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2 hours ago, montecristo said:

Similar situation.  Going to start a SIPP beginning of 2019.  I'm looking at the fire and forget SIPPs eg Vanguard life strategy's paying from my company account avoiding corporation and dividend tax.

I'm reading that vanguard are going to release their own SIPP product (next month) which should have a low fee and might shake up the big players and their fees.

I ended up using Alliance Trust who I already had a sizeable Investment trust with which I transferred into the SIPP. TBH I have found them quite bureaucratic and awkward to deal with. 

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I understand their current platform fees are favourable for smaller pots but less so on larger sums. So will be interesting to see how their offering compares.

Something to consider though is if you go with vanguard you will be limited to their funds, which might be restrictive if you come across other opportunities. I do hold two of their funds with a different broker.

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  • 4 weeks later...

The latest Vanguard SIPP news is that they won't be releasing the release date until 2019.  (IT issues causing a delay apparently).   So I'm going to go ahead and start a SIPP in the new year.  Still researching SIPPs, Close Brothers are top of my list as they have no fee for transferring their SIPP to another provider which I plan to do when Vanguard release their SIPP.  Sent a email to Close Brother to see if they provide the Vanguard life strategy funds and waiting a reply.

My biggest concern with SIPPs is HMRC moving the goal posts within the next 10 years.  eg moving the withdrawal age from 55 or increase SIPP tax etc.  Has anyone ever transferred their SIPP to another provider in another country? 

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38 minutes ago, montecristo said:

The latest Vanguard SIPP news is that they won't be releasing the release date until 2019.  (IT issues causing a delay apparently).   So I'm going to go ahead and start a SIPP in the new year.  Still researching SIPPs, Close Brothers are top of my list as they have no fee for transferring their SIPP to another provider which I plan to do when Vanguard release their SIPP.  Sent a email to Close Brother to see if they provide the Vanguard life strategy funds and waiting a reply.

My biggest concern with SIPPs is HMRC moving the goal posts within the next 10 years.  eg moving the withdrawal age from 55 or increase SIPP tax etc.  Has anyone ever transferred their SIPP to another provider in another country? 

They've already increased it to 57 from my understanding and i wouldn't be surprised if they go further and bring in line with the LISA which is 60. Can't help with moving a SIPP to another country.

I wouldn't focus so much on Lifestrategy. At the end of the day you can build your own Lifestrategy with two etfs/funds and the expenses will be less.

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1 hour ago, A_P said:

They've already increased it to 57 from my understanding and i wouldn't be surprised if they go further and bring in line with the LISA which is 60. Can't help with moving a SIPP to another country.

I wouldn't focus so much on Lifestrategy. At the end of the day you can build your own Lifestrategy with two etfs/funds and the expenses will be less.

Wow, didn't release it is being increased to 57 in 2028 and it follows 10 years behind state pension. 

That has put a damper on a SIPP as I will be probably be a year or 2 out of reach of ever claiming it.  Time to think about plan b.

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3 minutes ago, montecristo said:

Wow, didn't release it is being increased to 57 in 2028 and it follows 10 years behind state pension. 

That has put a damper on a SIPP as I will be probably be a year or 2 out of reach of ever claiming it.  Time to think about plan b.

Consider a LISA if you're under 40. Can be used at anytime after the first year on a house purchase or for retirement (at 60). All of it is tax free unlike a SIPP but you still get a 25% bonus. You can get the money out of a LISA with a penalty if you desperately need it. For me personally a LISA trumps a SIPP.

if you're over 40 then you may want to look at sticking with ISA's or splitting with the SIPP. Are you a 40% taxpayer? That may impact your decision though.

Personally I max out a LISA and then split any further investments 50/50 between ISA and SIPP. No way to know what will be changed going forward but this way I have a few options and how the money can be used and when it can be accessed.

 

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Just now, A_P said:

Consider a LISA if you're under 40. Can be used at anytime after the first year on a house purchase or for retirement (at 60). All of it is tax free unlike a SIPP but you still get a 25% bonus. You can get the money out of a LISA with a penalty if you desperately need it. For me personally a LISA trumps a SIPP.

if you're over 40 then you may want to look at sticking with ISA's or splitting with the SIPP. Are you a 40% taxpayer? That may impact your decision though.

Personally I max out a LISA and then split any further investments 50/50 between ISA and SIPP. No way to know what will be changed going forward but this way I have a few options and how the money can be used and when it can be accessed.

 

I'm in my early 40s.  I have a ltd company so the plan was to pay into a SIPP direct from company reducing corporation tax.  I pay basic rate tax. 

Yes makes sense, I think splitting between ISA and SIPP may be the best route.  ta.

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