Find the best broker for your Sipp portfolio

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What platforms can offer in retirement has become of vital importance since last year's pension reforms.

Rather than, in many cases, being forced to buy an annuity, savers aged 55 and over can now access their money purchase pension pots when and how they like, using flexible drawdown arrangements.

Many platforms were quick to offer pension investors full flexibility: flexi-access drawdown (FAD) and uncrystallised funds pension lump sum (UFPLS) payments being the two most flexible options. FAD enables you to take your 25 per cent tax-free lump sum in one go, leaving the rest invested to take an income from your fund when you need it.

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COMPLICATED CHOICE

With UFPLS, which has been called the 'cash machine option', every time you make a withdrawal, 25 per cent is tax-free and the remainder is taxed as income.

The reforms have made the choice of platform provider even more complicated. If you want flexible access to your pension, now or in the future, you need to consider what each platform offers and factor that in to your cost calculations.

In terms of Sipps our colour-coded table below highlights the cheapest and most expensive options for various pot sizes.

As with our Isa table the colours are straightforward: red means most expensive, moving through orange, yellow, greenish-yellow to green for the cheapest. This is not meant as any kind of endorsement; it relates to relative price only.

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On Sipp accounts, Interactive Investor's fixed £176 fee makes it look relatively costly up to £50,000, but on pot sizes of £100,000 or more it becomes the cheapest option.

Below £50,000, Tilney Bestinvest and Saga Investment Services charge the lowest fees. Their charges are identical, which is no surprise given that Saga's platform is a joint venture with Tilney Bestinvest.

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DRAWDOWN CHARGES

When it comes to drawdown, charges vary. For example, Halifax Share Dealing, and its sister iWeb, offer competitively priced Sipps when your pension is in saving mode, charging £140 and £110 respectively on £50,000 Sipp portfolios.

However, when you reach retirement and go from saving to drawing an income, charges jump. There is an extra fee of £180 annually for FAD until age 75 and £300 thereafter, even if you elect to take no income. That is a total charge of £290 at iWeb until age 75.

Fidelity Personal Investing and Hargreaves Lansdown both charge no FAD set-up fee, annual FAD fee or one-off payment fee if you ask for an irregular payment to be made.

Nor do they charge anything other than their regular Sipp fees if you ask for an UFPLS payment. Of the two, Fidelity is the cheaper Sipp provider, particularly on funds of £250,000 plus. At £50,000 it is still cheaper than Halifax and iWeb at £175.

New entrant Saga Investment Services trumps Fidelity at £50,000. It also has no FAD set-up fee or annual FAD fee and charges £150 for a Sipp at this level. At £100,000, with an annual fee of £300 and no set-up fee Saga is again the cheapest.

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