With the new rules brought in April 2015 then some benefits, such as income and flexibility to take capital have improved dramatically under a SIPP. Also, the fact is that QROPS or QNUPS are far more expensive than most SIPP products, if not initially then in terms of annual charges. Also, whilst a SIPP should never be utilised with investments held in an investment bond, and therefore be a fraction of the cost of QROPS, thus improving returns over QROPS.
In most cases, people up to the age of 74 are better off with a SIPP for retirement planning, rather than a QROPS, because of the Budget 2014 and new rule changes in 6 April 2015.
UK pension transfers by overseas advisers
Beware recommendations of an investment made into an investment bond via a SIPP. This is often very costly bad advice dictated by the limited licenses and lack of knowledge of the advisers/advisors! In fact, some of the better advice, following UK regulations, is only available through quality specialist pension advisers who understand regulations in the UK, and do not base their advice on who pays the highest commission.
I will do a quick comparison of the bond options and prices (2019/2020)
Trust Options for an International SIPP
| Trust Name | Novia International Sipp | Momentum International | Sovereign International | STM International SIPP | IVCMSIPP | Harbour International SIPP | Fourth Plus SIPP |
| Set Up Fee (GBP) | 0 | 300 | 300 | 150 | 100 | 399 | 400 |
| Annual Fee (GBP) P.A rate | 180 | 500 | 500 | 325 | 465 | 399 | 400 |
| Establishment of Benefits Fee (GBP) | 0 | 250 | 250 | 130 | 250 | 150 | 150 |
| Income drawdown fee (GBP) P.A rate | 62.50 | 100 | 100 | 130 | 300 | 150 | 150 |
| Termination Fee (GBP) | 0 | 250 | 250 | 155 | 995 | 499 | 0 |
Above are a quick guide to the trust options for a SIPP for the platforms where your Investments can be held here is an overview of the costs. This can be changed for the advisor’s fees.
Platform Options
| Platform Name | Location | Investment option | Commission | Charges | Rating |
| Ardan International | Isle of Man | 2000-3000 funds | Yes | 0.4%-1.5% depending on the advisor | 3.8 |
| Investor Trust Access Portfolio | Cayman/Labuan | 3000 Funds | Yes | 0.45-1.5% depending on advisor coms | 4 |
| Interactive brokers | United Stated | 5000+ Funds | Dealing coms | Depends on the value of the portfolio and how much you trade $8 a trade | 4.2 |
| Capital Platforms | Luxembourg/Singapore | 4000+ Funds | Depends on the amount being charged | 0.5-1.2% a year | 4.4 |
| Custodian Life | Cayman | 10,000+ Funds | 45 USD per trade | 0.7-1.2% | 3.8 |
I have in this article aimed to sum up some of the offshore bond and platforms options for a SIPP transfer for further reading please read some more on an article on SIPPs and platform reviews.
Is It Worth Me Putting My Pension in a SIPPs?
I am not going to comment, on individual pensions. But personally, am a big fan of pension freedoms in theory.
If you are U.K expat or still in the U.K the option to have pension investments what you are controlling, it seems a win to me, however, each person has individual circumstances. However, let’s look at why, well look at other developed countries U.S 401k gives you a chance to roll it over into an IRA and invest as you choose your investment.
Australian Supers, get an average 5% and give you more flexibility in the pension over the investment.
While the U.K pension system for me seems very stable, for most pensions plans. The returns are mitigated at best and are not done for individual circumstances. So, therefore, having more freedom, in theory, is a good option and can give you higher returns than what most schemes are getting by investing in low-interest-rate bonds.
The U.K SIPPs platforms are low cost, such as Vangard 0.25% a year, and set portfolios for a novice investor with Nutmeg that has made Sipps your pension somewhat easier. The one downside with Nutmeg is that it is a portfolio based on your risk profile and not personal circumstances, however, is very seamless to use.
Why Should I SIPPs My Pension
Well again I can’t comment on individual cases but some times some pension schemes come with cheap share buys in the company or a set number of shares or perks such as discounts on products if you stay in the company pension. To get the most personal answer to your circumstances, it is worth speaking to an advisor and they will be able to help you. An advisor does need to know as much detail as possible in order to help you the most.
With final salary pensions again, this depends on what scheme it is and how much is offered to get out and your situation. A lot of things need to be taken into consideration such as time frame, objectives, amounts, fees & where you currently are. I would highly recommend seeing a few advisors if you have one of these. But remember they are gold plated and rarely used any more for a reason. In fact, the law now states that you have to see an advisor if your pension is worth more than 30,000 GBP. This stops people from investing in wrong products and fads where they could have the rug pulled from underneath them.
When Is The Best Time To SIPPs My Pension?
Again it depends on your situation but I have seen a few companies such as Royal Mail & British Steel go into administration, if the pension scheme you are in is under threat I would see an advisor if you are considering to move.
I don’t think there is a perfect time, I believe it to be similar to trying to perfectly time the markets, I think staying up to date with the knowledge and if you want to look at regaining control of your pension and controlling your portfolio to suit your individual needs, then it is a good time to ask some questions.
What Are The Drawbacks of a SIPPs
Well, employers don’t have to contribute to your SIPPs and they likely won’t. Also, they may not let you SIPPs the pension if you are still working with the present company.
Benefit of SIPPs
Well the average by a study of Americans by LinkedIn, changes jobs 10 times before the age of 40 and only 3% by a survey by the balance careers found that only 3% stay in jobs, this means a lot of different pension schemes if you don’t manage them well. SIPPs give you the ability, to have one stable pension that you can contribute through the duration of your working life and is portable to wherever you are living currently. For example, you can be working in Singapore and still pay into your SIPPs.
If I Am Living Overseas Is a SIPPS In The U.K Or International SIPPs a Better Option?
Structurally, they work the same but have a few differences in regards to platforms and flexibility.
SIPPs in the U.K as seen below do have some lower fees than offshore but can have more tax implications. You need to consider the level of advice if you are getting advice from an advisor both in the U.K and offshore. I have written some articles that include this. You can have greater investment options offshore, and have the use of different currencies that may be more desirable if you are living overseas. They do have the same tax rules where income must be declared by HMRC.
If you want to speak to me in detail about your pensions and to get some advice on what might be best for you, please email me and I will arrange a time for us to talk, I will then be able to tell you what would be best for your pensions.
