A Guide to SIPP Providers
A SIPP (also referred to as a self-invested personal pension) is a retirement product that acts as a wrapper for all of your assets and gives you freedom of choice when it comes to where your money is invested.
The problem is, how do you choose which SIPP scheme provider to invest with? After all, your pension is precious and investing with the wrong SIPP provider could be risky.
To help you make an informed decision, we’ve put together this guide which will tell you exactly how to choose the right SIPP provider.
In this article we’ll be discussing:
What is a SIPP provider and what do they do?
A SIPP is a type of personal pension plan that allows customers to invest their pension (or part of it) into various investment opportunities. SIPP providers offer these opportunities to customers who have the intent of building their investment portfolio and therefore increasing their retirement funds.
There are a broad range of SIPP providers, each offering different terms and investment opportunities.
SIPP providers each have their own investment strategies, opportunities and fees, so before deciding to proceed with a particular SIPP provider, it’s important that you have an in-depth understanding about the company, your contract and the potential risks.
Below are a list of questions that you should know the answers to before investing your money.
- What charges or fees will you have to pay?
- Will there be management fees?
- How will you receive updates about your investments?
- Is there a minimum limit that you have to invest?
- Are the amount of investments you can make limited?
- What happens if you want to transfer or leave your SIPP provider?
- What is your expected return?
- How secure is the SIPP provider?
- Is the SIPP provider financially stable?
Your retirement fund is of the utmost importance, so you want to feel sure that you’re making the right financial decision for you. It can be really helpful to talk to a pensions advisor ahead of signing an agreement with a SIPP provider as they can highlight any unfavourable terms or fees that you should be aware of.
What are the responsibilities of a SIPP provider?
As with any financial product there is a risk and SIPP providers have a responsibility to not only manage that risk but to clearly inform their investors of any losses.
The Financial Conduct Authority (FCA) argue that SIPP pension companies have a duty to thoroughly check investments before investing their customer’s money and that any investments should be treated with “Skill, care and diligence.”
Who regulates SIPP providers?
Since the year 2000, SIPP providers have been regulated by four governing bodies including:
- The Department of Work and Pensions (DWP)
- The Pensions Regulator
- HM Revenue & Customs
- The Financial Conduct Authority (FCA)
It is the united responsibility of each of these governing bodies to protect consumers and to fairly create the rules regarding SIPP tax relief. The FCA in particular are responsible for ensuring that SIPP company marketing literature is clear and provides clarity on interest rates, key features and risks associated with the product.
Do I need a SIPP provider?
If you’ve decided to go down the DIY pension route, finding a SIPP provider could be a good way to enjoy freedom of choice over your retirement investments.
That said, while a SIPP can be a good retirement option for many investors, that’s not to say that there may be other pension products that could be better suited to your needs.
Tell a pensions expert what it is you want to achieve from your pension along with your budget and expectations.
Based on this as well as their knowledge of the many pension products, an advisor can recommend the best option for you.
Who are the largest SIPP providers in the UK and what can they offer me?
In the following section, we’ve provided a brief summary of some of the better-known SIPP providers and their stance on investments and pensions.
While this should give you an idea of the degree of variability that exists in this corner of the market, it is only intended as a snapshot of the products that are available, and we would always advise that you speak to an expert for a more complete picture.
Hargreaves Lansdown may be able to offer an extensive range of assets to invest in which could provide the flexibility needed to potentially diversify your portfolio.
With that being said, Hargreaves Lansdown, like many other SIPP providers, have been known to penalise their customers with SIPP charges such as early exit fees. Other costs to be aware of may include management fees.
As well as this, it may be the case that you are expected to pay an upfront minimum contribution for a Hargreaves and Lansdown SIPP.
For a broader look into a Hargreaves Lansdown SIPP or to find out more about Hargreaves Lansdown SIPP tax relief, make an enquiry and we’ll put you in touch with a specialist.
Some people are drawn to Fidelity SIPP cash accounts because of the variety of risk levels that they offer to their investors.
A spectrum of investment opportunities can allow those with less experience to invest, starting with lower risk opportunities.
With that being said, every investment is a potential risk to your financial future and so, as with any financial product, a Fidelity group pension SIPP should be carefully considered with the help of expert advice.
At the time of writing, you can pay up to £40,000 per year into a Halifax SIPP and still qualify for tax relief. You will pay no capital gains tax or income tax on your pension investments and receive between 20% and 45% tax relief on the money you pay in (depending on your tax band).
You will earn interest on any cash balance held in the account and the amount generated is tied to the Bank of England’s base rate.
Vanguard launched a low-cost SIPP in 2020, a product which comes with no wrapper or setup charges as well as no exit fees. In fact, you will only pay an account fee, a fund fee and transaction costs – all other charges have been waived for this product.
To find out how Vanguard’s new SIPP compares to the low-cost options from other providers, make an enquiry and one of the experts we work with will look into it for you.
Part of XPS Pensions Group, Xafinity is a full SIPP provider which offers SIPPs geared towards experienced investors. They could be a viable option if you’re hoping to hold commercial property, unlisted shares and other types of asset in your wrapper.
Make an enquiry and the advisors we work with will explore whether a Xafinity product is the right option for you. They can tell you how they compare to the other full SIPP providers on the market and help you make an informed decision.
@Sipp Limited, or AtSipp, as they are also known, are a Glasgow-based provider which offers a range of SIPP products, from the entry-level solo SIPP, right up to the full SIPP, which is popular among customers with non-standard assets, such as commercial property.
Make an enquiry and one of the independent advisors we work with will assess how their product range compares to the competition.
Standard Life’s SIPP gives account holders the opportunity to make single, monthly or annual payments into their account, which can be managed online, stopping and starting when you please.
If you’re transferring existing pensions into your SIPP, they will need to have a minimum value of £10,000, although this cap doesn’t apply if you have an existing SIPP.
Other SIPP providers
The advisors we work with also have a strong track record brokering deals with international SIPP providers, full SIPP providers and other scheme operators, including…
- James Hay
- Scottish Widows
- Royal London
- And many more
Remember, the SIPP providers we have mentioned in this article have been cited for example purposes. We have aimed to offer a representative overview of the market, but there are many more providers we have not mentioned.
The independent experts we work with, however, have whole-of-market access and will introduce you to the best SIPP company for your needs and circumstances. If you make an enquiry with us, we can refer you to them for a comprehensive look at the SIPPs on offer.
SIPP online providers
As well as the above well known SIPP providers, you may find it beneficial to consider the multitude of online SIPP providers, such as…
Curtis Banks launched their self-invested personal pension in 2019 but that’s not to say they’re newcomers when it comes to the world of investments or retirement products.
A benefit for those who are technologically inclined is that their product is completely digital.
This allows their investors to manage their accounts via their devices, including smartphones and tablets.
The freedom enjoyed by Curtis banks SIPP customers can be outweighed by some of their charges including an annual administration fee.
To discuss the pros and cons of a Curtis banks universal SIPP, speak to an advisor who can provide further information.
Rowanmoor Group boast an award-winning technical capability and service and for those looking for a SIPP which allows them to make decisions about where and when they invest, this could be an option.
However, something to consider and to discuss with your pensions advisor is the amount of fees that you may be liable to pay if you were to open a Rowanmoor SIPP.
In 2018, Rowanmoor group introduced due diligence fees which are chargeable upon opening the account. These can start from £500 and although these were put in place to screen investment opportunities and safeguard decisions. It’s worth noting that some SIPP providers such as Dentons Pension Management, do not charge this fee.
An insurance advisor can quickly identify the SIPP providers that charge this fee. Using this information as well as many other financial factors, they can recommend the best retirement route for you. Make an enquiry and we’ll introduce you to one for free.
Nutmeg is technically not a SIPP product and is referred to as an accessible pension plan. Their online platform allows customers to view their pension’s performance on the go, whenever they want.
A downside for some investors is the lack of freedom as Nutmeg does not allow their customers to decide where their money is invested.
Another factor to consider is that Nutmeg SIPPs charge a fee for managing investments and this is charged as a percentage of your portfolio value.
To avoid unexpected fees later down the line, it can be helpful to seek the advice of a pensions expert who can provide an estimate for these costs as well as provide a comparison of the other SIPP products and their charges.
EBS boasts strong technical support and unlike some other SIPP providers, EBS SIPPs have no minimum transfer value and no setup charge.
As well as this, EBS SIPP customers can enjoy the freedom of choosing their own advisors.
While EBS do offer a comprehensive range of investment opportunities, a downside to an EBS SIPP is that investments in overseas properties are not permitted.
How do I compare SIPP providers?
You should speak to a pensions professional who has access to the whole market and can provide you with a more in-depth analysis of each provider. Proceeding with a SIPP provider that can’t offer you the service or freedom that you need to grow your pension could have a significant impact on your retirement income.
Make an informed decision and have an expert review your circumstances against the terms and conditions of each SIPP provider.
The advisors we work with want to find you the best possible retirement solution and will carefully calculate the pros and cons of each SIPP provider before you sign an agreement. Make an enquiry and we’ll introduce you to them for free.
Who is the cheapest UK SIPP provider?
Whilst it’s true that a good deal is always worth considering and could be advantageous, the lowest cost SIPP provider may not be the most financially beneficial.
Charges and services vary heavily among SIPP providers whether online or traditional and the cost of these charges or service fees can affect the amount of pension that you are able to withdraw at any one time.
Costs associated with having a SIPP can also include management fees, although many SIPP companies allow their customers the freedom of overseeing and choosing their investments.
Whether a particular SIPP is a good deal for you is largely based on your own personal circumstances and preferences and the cheapest option may not allow you to make investments as and when you choose. For some people, the freedom that some SIPPs provide is a huge draw, so much cheaper and more restrictive options are ruled out.
That being said, price should remain a factor to be considered and you should always have a professional calculate your potential pension growth against the costs and fees that you may incur.
To compare the cheapest SIPP providers along with their charges and fees with the help of an independent expert, make an enquiry. You can also ask for a comparison of the other SIPP providers based on their investment opportunities and terms.
Which SIPP provider is best?
Because of the nature of investments, the performance of each SIPP company can change often, making it difficult to establish which SIPP provider is best placed to invest your money with.
The performance and end of year financial results of a SIPP company should be a factor to consider when comparing SIPP providers but there are also many other factors to consider too.
These may include:
- Costs and fees such as exit fees, early withdrawal fee or management fees
- The range of investment opportunities
- The level of control you’ll have over investments
- Your potential return
- Terms of the SIPP contract
To get a true indication of which UK SIPP provider is best for you, contact a specialist who can compare the various factors as well as your circumstances. One of the advisors we work with can also send you a list of all of the UK SIPP providers.
Can I change my SIPP provider?
Depending on the terms and conditions of your current SIPP agreement, it may be possible to change your SIPP provider.
However, before making the switch, always calculate whether the costs of any early exit fees could outweigh the potential financial benefits of a new provider.
Some SIPP providers do allow customers to transfer their funds without a fee, although this is rare as the majority will penalise their customers for leaving.
It’s important to be aware that some providers even charge a fee for each investment that you hold and therefore if you numerous investments, you could incur a large fee that could start to eat away at any gains you have previously made.
How to change SIPP provider
To start off, ask a pensions expert to review your investment options and carry out an extensive search of the SIPP market. The advisors we work with have access to SIPP companies across the UK and can provide you with an in-depth comparison to find you the best option.
You can make an enquiry with us and we’ll introduce you to an expert who can guide you through the process of switching from one SIPP provider to another.
Ask an expert
We have pension experts on hand to answer your questions and compare the best SIPP providers throughout the UK.
Pension investments come with a level of risk and before making a decision about which SIPP provider to invest with, it’s important that you understand the consequences of a failed investment strategy.
Call 0808 189 0463 or make an enquiry and we’ll introduce you to an independent expert who has access to providers across the entire SIPP market.