SIPPS Pensions

[RogerM]

Sean - Protected Righst cannot go into the SIPP - it must stay with a traditional pension provider. PR has to be kept separate because the benefits are paid according to strict rules which will almost certainly differ from the way in which you will choose to take the benefits from the main part of your pension. In this case you may wish to leave the PR with NU and transfer the remainder to a SIPP.

Be very careful to consider any penalties that may be levied on a transfer, particularly if you are currently in a with-profits fund, and/or you are within 10 years of retirement.

 

[timcatapult]

Sean.
RogerM is correct. Protected rights cannot go into a SIPP and there are rules on when they have to be drawn by way of an annuity.

My strategy is to have a drawn down from my SIPP sufficient for my income needs. Build up the fund and hope by the time I am 75 the rules have changed so that at that time I DONT have to convert the funds to an annuity (another rip off) That will then leave the bulk of the funds to my dependants.

I originally had a draw down arragemment with the managed funds which had enabled me to take 25% of the managed fund in cash and when I converted this to a SIPP added my existing SIPP and also took 25% of SIPP fund in cash and the two combined gave me my investment pot.

Suggest talk to a good IFA on a fee basis.

Good luck

Tim

 

[seancass]

Thank you for the replies Roger, Tim & Mayfly.

Self management is one of the attractions of the SIPP.

When you buy an annuity you are, in effect, handing over a large bundle of cash - thousands of pounds to an insurance company who will pay you a disgustingly low annuity while they assume ownership of the big fat wad of notes.

I understand the drawdown element if I wish to take a 25 % tax free lump sum, i.e. taking benefits; I'm not actually doing that yet. I'm afraid I jumped the Equitable ship following its collision with an iceberg, on the advice of trusted friends (not necessarily bad advice you understand) but I lost thousands in penalties for moving to NU so I want to make the best possible use with what is left and I reckon that I may not be too far behind the performance of the institutional fund managers. Mind you, the Property fund in Series 2 with NU is a consistently good fund.

One final question. Is there a limit to the amount of the available SIPP fund that may be invested in stocks at any one time?

Thank you .
Sean

 

[timcatapult]

Sean.

Not to my knowledge I am free to invest (within) the wrapper, how I choose.

My SIPP at the moment is shares and cash, gradually I hope to trade Intraday as I think overall this might well prove to be less risky and then I might well reduce my share holdings. My SIPP account is in the name of the Trustees re me and the Trustees receive the Daily Trade confirmations and the monthly statements - I get the duplicates. Most of the liquid funds are held in the name of the Trustees with a major bank on which I get interest (think the rate is 3% and of course no tax payable even on gains) Income tax is payable on the draw downs which I take. The min/max amount is fixed by the Inland Revenue relative to Gilt Yield/annuity rates/ believe age and obviously amount


Suspect if you tried to bend the rules by say investing in CFDs the broker would stop you. My first experience with options was when I recently wrote a covered call, the broker just checked with me I could trade options - I did in fact just check with the Trustees IPM. No problem so went ahead.

Hope that helps

Tim

 

[seancass]

Thanks Tim

Sean

 

[RogerM]

Another thing to check before you effect a transfer is to ensure that there is not a guaranteed annuity rate attached to your existing pension plan. These will mainly be pre-1988 plans (Retirement Annuity Contracts) which were the forerunners of the current Personal Pension Plans. Guaranteed annuity rates can double the returns available in the open market. Don't expect the existing insurance company to volunteer this information unless you ask them specifically - they want to get rid of these liabilities whenever possible.

 

[seancass]

Thanks Roger,

The very vehicle that steered the Equitable towards the iceberg perhaps?

I took the plan out around 1988. I'll check. Thank you.

Best wishes,
Sean

 

[RogerM]

Sean - yep! The very same. But Equitable held a huge number of these, and they tended to be large plans because of the fact that their target market was the professional community (solicitors, accountants, senior executives, doctors, dentists). But many other companies hold a small number of these, and even if they are all excercised they will only be a threat to profitability rather than their solvancy. Normally a g'teed annuity rate for someone approaching retirement now is very good news indeed, and a benefit that would be lost on transfer to another provider, such as a SIPP.

 

[fowkesp]

Sean,

I, too, held funds with Eq****ble Life. I was one of the lucky ones who had a GAR policy and was looking forward to exercising it, because the associated annuity rate was something like 10%, which is brilliant in the current annuity market. Sadly, however, the Court Case shenanigans resulted in a compromise offer being made by the Society to those members who held GARs. This was that they give up their GAR rights in return for the Society re-aligning their policy values and getting itself on a stable footing. The re-alignment resulted in an across-the-board cut in policy values, with the GAR holders receiving compensation for loss of the GAR benefit. For me that meant a cut in policy value, followed by an uplift for the GAR which left me the same as when I started - a good result compared to some others who lost 20% of their fund's value.

If you hold a with-profits policy with a GAR you should have been made aware of this by the Society over two years ago and had a chance to vote on the compromise offer.

Paul

 

[seancass]

I ran a course at e trades offices on Friday and they told me that sometime in the future they were looking at offering cfd's within a SIPP.

Hi Naz,

Do you know if E Trade have moved any closer towards the intention of allowing CFDs within SIPP trading?

Best wishes,
Sean

 

[Dentalfloss]

cfd is off exchange.a definite no no.the authorities will not allow anything off exchange.etrade is in cuckoo land,or trying to wind punters up to invest the money with them.cfd/sb will no be allowed/full stop.only instruments on exchange/thats it

 

[Dentalfloss]

the best idea for any equitable life gar holders.is to give up youre policies and get the money transferred.with the money buy the equitable life 8% notes.currently 80p in the pound.these are perpetuals.approx 10 plus yield.you will enhance the cashflow for eq

 

[Dentalfloss]

i bought eq 8% last year as junk bonds 26p in the pound.sold them 9 months later at 75p.the coupon is good and the policy holders funds is 95% in cash and bonds/few equities.a good investment for someone who recquires income.contact guy butler for other good junk bonds

 

[bertie]

Sipps And Forex

hi everybody.......apologies if this query has already been answered but i dont have time to read all the posts......

id like to use a sipp to trade forex with the trading being done either by myself or a us based friend who does this for a living.......is this allowable under the new pensions rules coming into play on 6 april or not?.....

if the fund was managed by my us based advisor he would have no access to the money.......it would be a in a standard forex account in my name....he wouldnt even know how much money was there.......the system he uses to manage multiple accounts splits profits between accounts on a "per cent" basis.....

any info would be appreciated......

 

[Dentalfloss]

hi everybody.......apologies if this query has already been answered but i dont have time to read all the posts......

id like to use a sipp to trade forex with the trading being done either by myself or a us based friend who does this for a living.......is this allowable under the new pensions rules coming into play on 6 april or not?.....

if the fund was managed by my us based advisor he would have no access to the money.......it would be a in a standard forex account in my name....he wouldnt even know how much money was there.......the system he uses to manage multiple accounts splits profits between accounts on a "per cent" basis.....

any info would be appreciated......

you can trade forex options.i think as they are market based

 

[bertie]

Sipps and Forex

hi dentist.....

thx for the reply......im not sure i understand why trading forex is not market based but forex options are......

 

[Dentalfloss]

hi dentist.....

thx for the reply......im not sure i understand why trading forex is not market based but forex options are......

.spot fx is mainly traded thru a bucket shop and not via a market.options are market based

 

[ChowClown]

SIPP costs appear to have reduced significantly over the last couple of years and as A-Day approaches, I'm tempted to take advantage of the free transfer out of the Equitable (I have a Unit Linked fund there) and open a SIPP instead. After some research the Hargreaves Lansdown Vantage SIPP seems to be one of the most competitive at the moment - does anyone else have other recommendations?

To begin with I'll take a position approach (won't use CFDs straight away), scanning FTSE350 stocks, buying dips off a moving average, setting an initial stoploss and then holding (unless stopped out) for a few months before reviewing the stop against the highest price over that period, and then trailing against each new high.

Any insight from those in the know much appreciated.

 

[Naz]

I noticed that Warrants can go in SIPPS. I've got some Merrill Lynch world mining trust warrants in mine. They're up about 100% in the last three/four weeks.


Naz

 

[seancass]

Hi Naz,

Good to see you at Heathrow a few weeks ago.

How did you hear of this mining fund? Excellent investment!

Best,
Sean