This will aim to outline the cost of trusts and platforms that can be used in a SIPP or as an offshore Investment account while briefly touching on what is a SIPP.
What is a SIPP (or ‘expat SIPP’) and who should have one?
A Self Invested Personal Pension (SIPP) is simply a UK pension vehicle for allowing investors to control their investment strategy, and retirement, themselves. It offers more control to the individual and does not rely on trustees to make decisions for them. The term expat SIPP is often used to describe a UK pension for expats.
SIPPs/International SIPPs are ideal for those with larger UK pension pots who want increased investment flexibility including currencies, or for those who are temporarily, but not permanently non-resident expatriates (expats), or for those who think they are likely to return to the UK to live in the future (or their surviving beneficiaries will return to the UK after their death).
If your fund is likely to exceed £1,000,000 by retirement, then a QROPS should be considered. SIPPs are the main-stay of retirement planning and are also inheritance tax-free and good for IHT planning.
Why would a SIPP be better than a QNUPS or QROPS?
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.
Offshore bond and platforms
| Bond Name | Fees Annual based on a 10-year plan | Dealing Charges | Establishment Charge | Surrender Charge | Upfront charges (what you pay on day one) | Admin Charge USD | Verdict | Personal Rating (5 stars) |
| Friends Providence International Reserve Bond | 1.5-2% | No | Yes | Yes | Yes 8% | 126 | A good brand name but with high fees | 2.7 |
| Friends Providence International Summit Bond | 1.6% | No | Yes | Yes | Yes 6-7% | 126 | High fees lack of liquidity | 1.9 |
| Friends Providence Zenith | 1.6% (add this uses mirror funds as well that can add 1.2% a year in chargers) | No | Yes | Yes | Yes 5-7% | 126 | Uses mirror funds would not be inclined personally to use this | 0.5 |
| Generali World Wide choice option | 1.5%-3% varying on advisors coms | Yes | Yes | Yes | Yes 5-7.5% | Included in the fees | Reputable company but fees really do eat up on this uses in Singapore mainly. | 0.7 |
| Investors Trust Assess portfolio plus bond | 1% | No | Yes | Yes | Yes 3-5% | 90 USD | Not a big name as other bond options but a cheaper option also has ETFs in the funds | 3.9 |
| Investors Trust Fixed Income | 7 USD | No (Hard to deal out as fixed term deposit ) | Yes | Yes | Yes | No | Low risk a higher interest fixed deposit rate from 1.5-3.6% | 3.3 |
| Old Mutual Collective Investment bond | 1-2.5% | Yes | Yes | Yes | 3-7% | No | A good company with moderate charges in the medium charges | 3.1 |
| Old Mutual Exclusive Bond | 1.5%-2.5% | Yes | Yes | Yes | 3-7% | 15 GBP | A respectable bond charges but as with them all a high cost that adds up if not used right. Mirror funds are also used. | 2.8 |
| Prudential Bond | 1-2% | Yes | Yes | Yes | 5% | 1% | With funds charges of 1%-1.5% this adds up. | 2.3 |
| RL360 PIMS | 1.6%-2.1% | Yes (first 10 free) | Yes | Yes | 5% | 0.2% | Popular choice for advisors expensive cheaper and better option are available for most personal | 2.2 |
Here are a few of the options for the bonds as can be seen most of these can really add with the trust fees I personally see better platforms options for most personals. Especially with those under 500,000 USD non-trust options. Any advisor that would advisor one of the high fees products otherwise would be doing due to the commission.
For further information about offshore bonds please read my articles on offshore bond reviews, low-cost platforms, SIPP guide, and 10-minute investment guide for expats.
I will give a brief review on the platforms used for your SIPP in the offshore market.
Platform Options
| Platform Name | Location | Investment option | Commission | Charges | Rating | Verdict |
| Ardan International | Isle of Man | 2000-3000 funds | Yes | 0.4%-1.5% depending on the advisor | 3.8 | Can be expensive with advisors coms but if taken off a reasonable low-cost option online system is still slow |
| Investor Trust Access Portfolio | Cayman/Labuan | 3000 Funds | Yes | 0.45-1.5% depending on advisor coms | 4 | Good online technology and fund range that can be low cost. But based in the Caymans. |
| Interactive brokers | United States | 5000+ Funds | Dealing coms | Depends on the value of the portfolio and how much you trade $8 a trade | 4.2 | A great option but more of a trading option than a SIPP or offshore pension plan. FCA is not open to offshore clients |
| Capital Platforms | Luxembourg/Singapore | 4000+ Funds | Depends on the amount being charged | 0.5-1.2% a year | 4.4 | A good location and a good online platform. |
| Custodian Life | Cayman | 10,000+ Funds | 45 USD per trade | 0.7-1.2% | 3.8 | A good option for a bond but a high-cost trading platform. A reasonable option for a SIPP. |
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.
If you have any questions on international SIPPs as a UK expat or you want someone to clear up any questions you have, please email me at info@investmentsforexpats.com
