Contact

News & Insights

The Three SIPPs

And chances are that when you come to discuss the issue with your expat financial services specialist, the issue of a SIPP will raise its head.

However, the idea of a SIPP is often not well understood – particularly the distinctions between the three major types of account. Here we take a look at the three types of SIPP and examine why the schemes might be a tax-efficient way to help you save for retirement.

Full SIPPs

A full SIPP provides the greatest flexibility and the broadest range of investment opportunity, but it may also have higher charges. It is important to understand that a full SIPP should never be entered into without full comprehension of the fact that – unless you ask a professional to manage the fund on your account – you will have to manage it yourself, which, to the lay investor, bears all the risks of high stakes pensions roulette.

Also, be aware that a full SIPP is only suitable for larger sums. The average amount invested in a SIPP is between £150,000 and £450,000

Full SIPP fees can be charged at a flat rate or as a percentage of the value of the investment. Full SIPPs also come with a creation fee, an annual management charge and may sometimes require a minimum monthly contribution.

Low-Cost SIPPs

A low-cost SIPP is usually “execution only” meaning that unless you are a seasoned and confident investor who is fully appraised of all the risks you will be learning on the job. Your SIPP provider will not be offering you advice; therefore, you will be responsible for all the choices you make.

Furthermore, although a low-cost SIPP offers a wide range of investment choices, these cannot include offshore funds, unquoted shares or direct property ownership. This is not to say that a low-cost SIPP is unsuitable for everyone; those with smaller pension pots and clear investment ideas may still find this type of pension plan is a suitable retirement savings vehicle.

One benefit of the execution-only nature of a low-cost SIPP is lower charges. There is no annual charge, online trades cost around £15 a time and telephone trades are charged at around 1%.

‘Hybrid’ SIPPs

These are essentially insurance products. In a sense they negate one of the main selling points of a SIPP in that unless you have already invested heavily in the insurance companies, you will have little to no control of how your money is invested.

A Hybrid SIPP usually comes with a creation fee and a capped annual management fee, although there are not likely to be any trading fees.

Expat Pensions Advice from Expat Financial Services Professionals

If you are a British expat in Europe and want to protect and grow your pension pot in a way that allows you to pursue your long-term goals while maintaining your present cashflow needs, Blacktower FM can help you find the international pension transfer strategy and products that are right for you.

For more information, contact your local office today.

This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.

Other News

TOP TIPS – Review Your Finances for 2020

Ready for 2020The start of a new decade, and with it the beginning of a new era for Britain and its citizens in the form of Brexit, represents the perfect time to review your wealth management plans. From taking a look at the suitability of your asset allocation and your pension savings to reviewing your tax and estate planning, now is an especially pertinent time to develop a clear path into the future.

While Brexit is not quite a done deal yet, there is at least some clarity and although Boris Johnson might have been unable to get Brexit ‘done’ immediately, one thing is pretty clear: as of 31 January, the UK really will begin the process of leaving the EU.

Read More

Good news only, please

Dave Diggle

As an IFA I have become very sensitive to market reactions and I have always had an interest in current affairs, but at this time even I am getting bogged down by this endless supply of bad news.

The recent drops in the stock markets are simply down to confidence and not of the same making of the crisis eight years ago.

I still struggle to see why a barrel of oil at $27 dollars compared to the $108 of eighteen months ago is anything other than good news. After all, there are more consumers of oil than producers. Motorists felt the positive effect immediately and users of oil in industry such as manufacturing plants or airlines should post better than expected quarterly profits, which may help dividend levels. In many cases this is yet to be rolled out.

Read More

Select your country

Please select your country of residence so we can provide you with the most relevant information: