With such an array of SIPPs on the market it can be tricky finding the most appropriate and cost effective plan for your retirement. There are some extremely elaborate plans that may be better suited for larger or more complex pension plans that allow more diverse investments, such as commercial property. Here are some pointers you should consider when planning a SIPP.
- How much does it cost to set-up? Depending on your adviser, the fees can range from free to a fairly common£300 pa, depending on the flexibility and assets required, it may be much more.
- What rate of interest can I expect?Interest rates vary according to the best rate available worldwide.
- Are there any transfer fees? Transfer fees may be applied when moving money or shares into a SIPP from another provider. There may also be exit fees when moving money away from one provider which can be up to a few hundred pounds.
- What are the annual management fees applied? There can be a small percentage charge applied every year that will be deducted from your returns; however it is possible to get a fee-free plan with certain providers.
- Are there any annual fees? There are on-going fees that are applied to the funds that you put into your SIPP portfolio, typically around 1% to 1.5% a year. Again, some providers can reduce this fee.
- Any other charges? There may be fees applied in instances such as purchasing an annuity or costs for paying out on death of the policyholder etc.