Sipps: Make or break

This article is part of
Sipps special report – October 2015

The Tables in this year’s survey are slightly different, and in a different order, hoping to make it easier for advisers to use. This year’s Table 1 looks into charges, possibly the first element an adviser will look at. Overall, initial charges and annual management charges have not changed over the past six months since April’s survey.

Charges for transferring in and out are also documented in the Table. Starting from the top, it shows @Sipp has increased transfer out charges in its Collective and Solo Sipps to £400 from £100 and £250 respectively.

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Rowanmoor has also raised fees slightly with a transfer out starting from £300 rather than April’s £255. Reasons for raising transfer out costs can simply be put down to the pension freedoms earlier this year. As more people are emptying pension pots, providers can use it to their advantage and it would not be a surprise to see more Sipp operators increase this fee in future years. While looking at costs, this can also include different options in retirement. Table A looks into retirement options available and other charges associated.

Transaction charges throughout the years do not typically increase massively, and this year’s survey shows that. New to the Table this year is a look into in specie charges and non-standard asset fees. In specie charges tend to be among the smaller print within a Sipp prospectus.

It is important not to get caught out by any charges, and this Table shows the charges differ hugely, from many providers not having in specie charges, to Curtis Banks’ maximum £500, Westerby charges go up to £880, while the highest maximum in specie transfer comes from Hornbuckle with a £1,000 fee.

While many charges are subject to VAT, some providers include it within their quoted fees. This is illustrated in the Table. Non-standard assets have long been a tricky issue with Sipp operators, and the debate over standard and non-standard assets is sure to continue well past September 2016. As with in specie charges, the costs associated with standard and non-standard assets varies hugely. This will also depend on whether a provider has chosen to classify commercial property as a non-standard asset or not, so it is difficult to compare costs over these two columns.

Commercial advantage

Property will long be an issue for many providers, but the fact that you can invest in commercial property is one of the biggest selling points of a Sipp. Table 2 has been brought into the magazine from online. Changing again from the previous version of the Table, it looks into the number of properties the provider has, how many are in hotel rooms, UK properties, overseas properties or land holdings.