Interactive Investor temporarily scraps Sipp charge

Interactive Investor temporarily scraps Sipp charge

Direct-to-consumer platform Interactive Investor is offering to waive its monthly self-invested personal pension fee for a year, as it warned charges risked a "serious dent" to people's retirement plans. 

The investment platform will waive its £10 monthly Sipp fee until April 2021, on all new accounts opened between March 3 and April 3 this year. 

Interactive Investor warned the impact of platform charges "arguably mattered more" in relation to Sipps because they often hold larger sums of money over a longer period of time. 

Moira O’Neill, head of personal finance at Interactive Investor, said an individual's home was commonly mistaken as their biggest asset, when often it is their pension. 

Ms O'Neill said: "The impact of compound interest over a 25-year period of investing for retirement – with often another 25-year investment period extending past traditional retirement age – means charges matter."

Research collated by The Lang Cat last month suggested a £100,000 Sipp pot, with an assumed annual growth rate of 5 per cent, would have £22,000 more with Interactive Investor over a 25 year period, compared with the platform's largest competitor. 

Ms O'Neill said these figures, which were gathered on behalf of Interactive Investor, did not include any special offer such as the current charge waiver on Sipps. 

Ms O'Neill added: "While a percentage fee will better suit those with smaller pots, pension investors should expect their fund to accumulate as they contribute funds and benefit from investment growth over time.

"As they near retirement, the sums involved may be substantial, with pension millionaires set to be more common in the 2020s.

"This is where charges can really mount up and the savings for investors who shop around can be life changing."

In January Interactive Investor scrapped its regular investing fee in a move which meant investors no longer had to pay a 99p charge per investment, providing they invested at least £25 per month.

The platform said it hoped the move would leave customers with "just one easy-to-understand, pounds-and-pence monthly flat fee."

Last month the company announced it was set to buy rival platform The Share Centre for £61.9m, with the consumer platform market beginning to mirror the wave of consolidation currently gripping the adviser platform landscape.

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