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Feeling lazy - is there a cheat's guide to SIPPs?

Including Financial Independence and Retiring Early (FIRE)
Charlottesquare
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Re: Feeling lazy - is there a cheat's guide to SIPPs?

#510266

Postby Charlottesquare » June 28th, 2022, 2:37 pm

hiriskpaul wrote:I agree with ursaminortaur's list. I am with HL which are probably the most expensive of the 3, but I have always had excellent service from them.

With both HL and Youninvest there is a capped fee (£200 per year with HL) provided you avoid OEICS. They charge extra for those. II I beleive do not charge extra for OEICS.

When you reach 55 you might like to consider crystallising precisely 100% of the LTA and then leaving the rest uncrystallised*. If you do this at HL that will leave you with 2 accounts and so 2 lots of charges. As I understand it this does not happen with Youinvest, which would certainly make Youinvest the cheaper option. Not sure what happens at II.


* This leaves the excess amount of money outside your estate and so free of inheritance tax. You will not dodge the LTA test though as this will still happen at age 75 or before if you die before reaching 75. There is also a (slim) chance that the LTA rules might be abolished or changed in your favour!


HL are not that bad if you buy and sell infrequently (ideally never) , buy shares not funds and have reached the 200 per year fee cap with them re size of fund.

Snakey
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Re: Feeling lazy - is there a cheat's guide to SIPPs?

#510377

Postby Snakey » June 28th, 2022, 6:44 pm

An extra £40 is not that big of a deal considering the size of the purchase I'll be making (although perhaps enough for me not to be mad keen on splitting the pot into ten separate holdings). I just need to be careful, then, not to buy anything that isn't in sterling - but I think that is OK as I don't think any of the ones I was thinking of have that issue. As long as ii haven't also sneaked in some kind of special extra ongoing fee for holding funds.

Since my last post I've had the transfer certificate through the post on the first one, giving a date of the 17th (and warning it'd take five working days for the funds to reach the other provider), although nothing's showing in my ii SIPP account yet.

The other one, which I instructed a few days later, is still showing in my SL account as normal, so maybe the fact that there's going to have to be that one holding left behind (the property fund with the "delay period") is causing them conniptions behind the scenes about how to make it work. I really don't know how common this all is.

I think I won't even attempt to keep tabs on what the market does once the remainder of the funds (that's the big pot, so £1m-ish* ignoring the property fund) are sold by SL and before I get it reinvested within ii. I can't do anything about it so I don't want to know! Obviously a little mini-crash would be nice, although not just quite yet please.


*It was higher but, according to SL's numbers, that Vanguard All-Share one (that I've got loads in) lost 24% of its value literally over the course of today? I certainly hope that jumps back up first thing tomorrow!

Hariseldon58
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Re: Feeling lazy - is there a cheat's guide to SIPPs?

#510454

Postby Hariseldon58 » June 28th, 2022, 11:09 pm

TedSwippet wrote:
Hariseldon58 wrote:I found the £40 fee with ii the hard way, it’s deeply buried… yes you could do two transactions to get them under £100k if it was say £180k.

Yeah. Page 2 of the charges document, although same font size as everything else. My main niggle is that much of the rest of the site fails to note this, for example Our Charges; no disclaimer or footnote on the £7.99 trading fee claim.

Hariseldon58 wrote:Note the currency charge halves from 1% to 0.5% ie save a few quid on the transaction fee but lose hundred in the currency charge, ii are very expensive when it comes fx charges.

Youinvest and HL both charge 1%, so while not cheap, not really out of line with the competition it seems. Personally, I use all GBP traded funds and ETFs, so not had to tangle with this. Presumably cheaper options are available elsewhere?

Hariseldon58 wrote:There’s a lot to like about ii but some aspects are suboptimal.

Something else I've just found to like is the recently introduced "Pension Builder" plan. My ISA and trading account are elsewhere, I hold only a SIPP in Interactive Investor, and I trade at most two or three times a year. I'm currently paying £20/month; moving to this will drop to £13/month, saving me a handy perhaps £60-70/year. A couple of years ago I was paying £30/month for my SIPP; Interactive Investor dropped the added £10/month drawdown fee in late 2020.

All in all, and while of course not perfect, it seems to me that Interactive Investor's business model is more aligned with customer interests than Youinvest's, HL's, and so on. Also, I have a fundamental distaste for platforms that play silly games around fees for funds. There really is no excuse for that, and I avoid them on principle.


HL’s currency charges are much lower than ii, on a deal of 99,999 ( avoiding that £40 dealing charge ) the cost is £999.99 with ii, at 100,000 you pay the £40 but the fx charge drops to £500.

HL have a tiered charging structure and it’s £337.50. In addition HL offer some listings that are in £ not foreign currency etc

So ii fx starts at 1.5% and falls to .25% at 600k, with HL it falls to .2% at 20k

There’s a few other things but HL is far better for international than ii, there will be other brokers better still of course.

I still like ii, despite having paid some very much higher charges than I need have !

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Re: Feeling lazy - is there a cheat's guide to SIPPs?

#517805

Postby Snakey » July 28th, 2022, 8:22 am

Right, one final brace of questions then I promise I'll drop the subject and let this thread rest in peace!

Finally the cash arrived in my ii SIPP account yesterday (unfortunately this was SL sitting on it for a month before doing anything, rather than them selling 4-5 weeks ago but then taking ages to do the bank transfer, so I didn't miss out on any drops). I now need to invest it before e.g. Putin drops dead and the markets jump 10% in an hour... although I suppose equally he could nuke Ukraine tomorrow morning and I'll be glad I'm sitting in cash... but anyway. I'm working on the principle that since I agree with the theory that the stock market is the best place for my money then I should be prepared to back that up with my actions and not faff around with "yes, but today is different".

But before I start pressing buttons of my own, can anybody tell me more about:

1. (The bigger question) What's this ii currency charge thing you were talking about upthread? I hadn't heard about it before, or if I had I had assumed it wouldn't apply to anything I was doing (I'm not about to start investing in individual stocks in US companies or whatever - it's going to be funds all the way). I was going to go and pick a selection from something like this: https://monevator.com/low-cost-index-trackers/ or even just https://monevator.com/best-global-tracker-funds/ but now I'm worried I'm missing something! Is it the case that some of these will have a hidden currency charge wiping 1% off the value of whatever I put in straight away (and presumably another 1% off when I take it out too) and some won't? How do I tell which is which? Is it like "UK good, Ireland bad" or more subtle? Or am I over-complicating matters and nothing that I'm looking to invest in is likely to have this charge?

2. (The smaller question) If I use their regular investor thing which allows me to make the trades for free, do I still get charged that extra £40 that you were talking about? If I do, I might split it to keep them all below the £100k mark, but I'd sooner not do that if I don't need to - funds to invest are a shade above £1m in total (that property fund had to stay behind as it can't be sold yet) and I was only going to put it in two or three. I know a few hundred quid is just noise at this level, but even so, I'd rather have it making that noise in my pocket than someone else's if there's no downside to that.

Thanks once more!

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Re: Feeling lazy - is there a cheat's guide to SIPPs?

#517809

Postby Alaric » July 28th, 2022, 8:33 am

Snakey wrote:) What's this ii currency charge thing you were talking about upthread? I hadn't heard about it before, or if I had I had assumed it wouldn't apply to anything I was doing (I'm not about to start investing in individual stocks in US companies or whatever - it's going to be funds all the way).



I think the point being made was that ii could be more expensive than other Brokers for someone investing directly in US markets. That isn't relevant to London or Irish based OEICs or ETFs as the settlement would be in sterling.

TedSwippet
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Re: Feeling lazy - is there a cheat's guide to SIPPs?

#517829

Postby TedSwippet » July 28th, 2022, 9:30 am

Snakey wrote:1. (The bigger question) What's this ii currency charge thing you were talking about upthread? ... Or am I over-complicating matters and nothing that I'm looking to invest in is likely to have this charge?

Over-complicating. Nothing you're contemplating has this. Only relevant if you will trade directly in non-UK (specifically, non-GBP) shares. The side-discussion on forex rates was simply an irrelevant digression. UK and Ireland domiciled funds all trade in GBP.

Snakey wrote:2. (The smaller question) If I use their regular investor thing which allows me to make the trades for free, do I still get charged that extra £40 that you were talking about?

On a £1m SIPP currently in cash, I wouldn't hesitate to pay the one-off £40 to get the whole lot invested into a single Vanguard LifeStrategy fund right away, accumulation units. After that, just leave it alone to do its thing.

Your outgoing SL portfolio was around 35% bonds, so LifeStrategy 60 is probably the best fit. LifeStrategy 80 might also be a decent choice, depending on how long you plan to leave this untouched. Or you could spring another £40 and go 50:50 across both of these for an effective "LifeStrategy 70". No reason to "pick a selection" from a bunch of funds when there is one that's done this for you. See:

Best multi-asset funds - Monevator
Vanguard LifeStrategy funds review - Monevator

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Re: Feeling lazy - is there a cheat's guide to SIPPs?

#517939

Postby Snakey » July 28th, 2022, 3:28 pm

Right! All done. I went for a mix of two global all-caps (Vanguard and HSBC) and VLS80. There's already £53k in VLS100 where I dropped it in a hurry about a month ago, and £70k stuck in a property fund in SL. So all in all it's a right dog's dinner, especially when you throw the ISA and GIA holdings into the bigger picture mix, but never mind - it's all "doing something" and that's the main thing, I can finesse it at my leisure (and practice my despairing scream when it falls 20% over the next six weeks). I have nearly five more years before I could touch my pension even if I wanted to, and who knows what could happen between now and then. Better watch out for those fast-moving buses!

Thanks so much to all of you who have guided me patiently while I've channeled my inner headless chicken.


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