Vanguard SIPP.

[neversay]

You had me excited there. I'm interested and have been signed up for months. Still no indication of it going live though!

[paulnumbers]

You had me excited there. I'm interested and have been signed up for months. Still no indication of it going live though!

Apologies if you're already aware. Vanguard are still saying it will be launched in 2018. You may have a mere five months to wait now.

Yeah, and I hear Brexit will happen in March 2019 too

[neversay]

You had me excited there. I'm interested and have been signed up for months. Still no indication of it going live though!

Apologies if you're already aware. Vanguard are still saying it will be launched in 2018. You may have a mere five months to wait now.

Thanks for bringing it to everyone's attention (no need for apologies). It's just like waiting for Santa!

[dingdong]

Why are people excited about Vanguard launching a SIPP on their own platform rather than just investing in Vanguard Target Retirement Funds on other (cheaper) platforms which they can do now?

[b0f77]

Why are people excited about Vanguard launching a SIPP on their own platform rather than just investing in Vanguard Target Retirement Funds on other (cheaper) platforms which they can do now?

Which are the cheaper platforms to hold large accounts with Vanguard funds in a SIPP, especially if thinking of going into drawdown? My SIPP is with Hargreaves which charge 0.45% on funds uncapped, so I only hold ETFs in there (charges capped at £200 on ETFs). I think there are some cheaper platforms like Halifax, iWeb and Interactive Investor, but these look more expensive in drawdown than HL and I am close to doing that. So for me Vanguard look interesting for a SIPP because:

- Currently charging 0.15% capped at £375 over all accounts so if this is going to include a SIPP account, very interesting (may not though)

- They say they aim to reduce costs for investors. They are not out to make profit for shareholders, so hopefully won't keep changing their charging structure to increase their take from investors in the future.

It remains to be seen what their charges will be for operating a SIPP account though as these accounts have more admin overhead I think. We shall have to wait or hold funds elsewhere. The Vanguard SIPP does seem to have been a long time in the making.

[StepOne]

Which are the cheaper platforms to hold large accounts with Vanguard funds in a SIPP, especially if thinking of going into drawdown? My SIPP is with Hargreaves which charge 0.45% on funds uncapped, so I only hold ETFs in there (charges capped at £200 on ETFs). I think there are some cheaper platforms like Halifax, iWeb and Interactive Investor, but these look more expensive in drawdown than HL and I am close to doing that.

iWeb SIPP is £180 annually - same when in drawdown.

https://www.iweb-sharedealing.co.uk/PDF ... harges.pdf

I think that Halifax will be the same as they are part of the same group. I often wonder if I must be missing something with iWeb charges, because they seem so much cheaper than other providers for large SIPPS. Happy for someone to point out where I am going wrong, or re-assure me that I'm right.

Thanks,
StepOne

[TedSwippet]

iWeb SIPP is £180 annually - same when in drawdown. ...

I am pretty sure that £180 annual charge for drawdown is in addition to the £45/quarter (£180/year) charge for simply holding a SIPP. So £360/year once you get into drawdown, then.

For comparison, Interactive Investor would charge £22.50/quarter for an account (that would include 9 'free' trades/year), £100+VAT/year for a SIPP, and £100+VAT/year for drawdown, for a total £330/year. Not a great deal to choose between them then, although Interactive Investor offers a slightly better value proposition if you trade even just a little, perhaps as little as only occasional rebalancing.

I think that Halifax will be the same as they are part of the same group. I often wonder if I must be missing something with iWeb charges, because they seem so much cheaper than other providers for large SIPPS.

iWeb are indeed good for large SIPPs holding funds or OEICs, just perhaps not quite as good as you had been thinking. Interactive Investor are also good for similar large SIPPs. Alliance Trust Savings would be next in the cheap-but-acceptable stakes.

HL are cheap for drawdown but only if you hold ETFs and avoid funds and OEICs. Otherwise, for large SIPPs in funds or OEICS, HL are extortionate in comparison with the above.

As for Vanguard... we'll just have to see what their SIPP value proposition is (and it's a long time coming). In practice, a sizeable holding of Vanguard funds is likely to be cheaper to hold outside the Vanguard platform rather than on it, but it needs to be quite chunky. For example, assuming Vanguard do not apply a separate SIPP charge -- and they may well -- break-even for 0.15% to reach Interactive Investors £330 is a £220k SIPP.

I hold Vanguard funds in an ISA in iWeb, and here iWeb definitely has the edge. A single £25 joining fee and then no annual holding charge at all beats Vanguard's platform's annual 0.15% for all but the tiniest ISA investment held over the shortest period. Likewise for non-ISA and non-SIPP unwrapped accounts.

[StepOne]

iWeb SIPP is £180 annually - same when in drawdown. ...

I am pretty sure that £180 annual charge for drawdown is in addition to the £45/quarter (£180/year) charge for simply holding a SIPP. So £360/year once you get into drawdown, then.

Hi Ted,

Yes, you are right, I checked with iWeb and the drawdown charge is an addition, so it would be a total of £360 a year. Still a reasonable charge once your SIPP is into 6 figures.

StepOne

[swill453]

Yes, you are right, I checked with iWeb and the drawdown charge is an addition, so it would be a total of £360 a year. Still a reasonable charge once your SIPP is into 6 figures.

Maybe, if you are investing in funds.

My SIPP, well into six figures, costs me a total of £130 per year* with AJ Bell Youinvest. This is because it's invested in Investment Trusts and shares.

* - £100 per annum custody charge (the maximum they would charge) plus £25 + VAT for a one-off drawdown per year.

Scott.

[TedSwippet]

Maybe, if you are investing in funds. ...

Yes. But the stated premise in the enquiry a few posts earlier was specifically: "Which are the cheaper platforms to hold large accounts with Vanguard funds in a SIPP, especially if thinking of going into drawdown?"

Outside of that restriction on holdings, the likes of HL and YouInvest can of course offer good value. And many -- although not all -- Vanguard passive tracker OEICs can be replaced by more-or-less equivalent ETFs. This provides a cost-effective solution even on platforms with outrageous fees for funds, by simply bypassing those fees. It won't work anything like as well for actively managed funds, though.

Personally, while I could probably switch most of my SIPP's Vanguard fund holdings into Vanguard ETFs that are broadly equivalent, I haven't chosen to do that at the moment. Part of this is because I want to actively support the flat-fee charging model -- holding funds rather than ETFs, shares or ITs cannot possibly be an order of magnitude more complicated or more expensive for a platform (and indeed, that flat-fee platforms exist at all prove that it is not). The other part is that I do not wish to move all my carefully selected holdings around purely to sidestep a silly policy put in place by some marketing halfwit employed by HL or YouInvest.

[StepOne]

Yes, you are right, I checked with iWeb and the drawdown charge is an addition, so it would be a total of £360 a year. Still a reasonable charge once your SIPP is into 6 figures.

Maybe, if you are investing in funds.

My SIPP, well into six figures, costs me a total of £130 per year* with AJ Bell Youinvest. This is because it's invested in Investment Trusts and shares.

* - £100 per annum custody charge (the maximum they would charge) plus £25 + VAT for a one-off drawdown per year.

Scott.

That's interesting Scott. I looked at the Monevator table before plumping for iWeb. http://monevator.com/compare-uk-cheapes ... e-brokers/

They separate brokers into 'flat rate' and 'percentage' - I was only really interested in flat rate brokers and so missed the AJ Bell entry. Looking at it now says basic account fees are '0.25% of the first 250,000 of funds', then under SIPP it says '+0.25%', which makes it looks though the total charges for a SIPP would be 0.5%. But in fact I guess this only is true if you have funds in you SIPP (which I do, but they could easily be changed for equivalent ETFs).

The Monevator table is a great resource, but it shows that there are still quirks in charging that are hard to summarise easily.

StepOne

[swill453]

They separate brokers into 'flat rate' and 'percentage' - I was only really interested in flat rate brokers and so missed the AJ Bell entry. Looking at it now says basic account fees are '0.25% of the first 250,000 of funds', then under SIPP it says '+0.25%', which makes it looks though the total charges for a SIPP would be 0.5%. But in fact I guess this only is true if you have funds in you SIPP (which I do, but they could easily be changed for equivalent ETFs).

I think the +0.25% only applies to shares, ETFs etc. (and has a maximum of £25 per quarter).

For funds the cap is much higher, though the percentage does get lower if you have a larger pot.

Scott.

[GeoffF100]

Vanguard has promised an update on launch timings "in December":

https://www.vanguardinvestor.co.uk/inve ... ount-types

Vanguard was promising the launch the SIPP by the end of the year, so there has been some slippage.

[GeoffF100]

The aforementioned link now says:

"We're launching a Pension (SIPP)

Thinking about saving for your retirement? It's taken us a little longer than we'd hoped but we are now in the final stages of building the new Vanguard Personal Pension. Sign up to be the first to hear when we add this new account in 2019."

[EverybodyKnows]

There are (some) details here: https://www.vanguardinvestor.co.uk/arti ... KCESIP0001

In short, in 2019 they might know something. Bit disappointed.

[Cookie]

XO had no annual fee, but think that's changed now