The best & cheapest SIPPs – low cost DIY pensions
In this independent SIPP comparison we compare SIPP charges from all the best SIPP providers to help find the cheapest SIPP for you. A SIPP is short for a Self Invested Personal Pension. Finding a cheap low cost SIPP is only part of the story. In order to find the best SIPP provider for your personal circumstances you must consider more than just cost.
I suggest that you start by downloading the following excellent SIPP guide from the UK’s leading SIPP provider which tells you:
- How to start building a DIY pension pot in minutes by using a SIPP
- How to benefit from the new pension rules with a SIPP account
- How to improve your existing pensions and transfer them into a SIPP account
- How the pension tax rules work including tax relief on SIPP contributions
- The tax advantages of a SIPP and how they can boost your pension pot
What is a SIPP?
A SIPP is a DIY pension where investors can choose their own investments. The full title is Self Invested Personal Pension. Traditional personal pensions limit your investment choices to a small number of funds typically run by the pension provider’s fund managers. With a SIPP you can invest anywhere you want making your own choice of pension funds and managing them over time. That way you can ensure you are in the best pension funds and maximise your pension fund at retirement.
How do SIPPs work?
A SIPP works in a similar way as investing in a Stocks and Shares ISA via a fund platform, the only difference is that you get income tax relief on your SIPP contributions when investing in a SIPP. Using a SIPP to build a private pension fund gives the investor complete control over their investments to hopefully obtain a greater return than using the limited investment choices of a simple personal pension product, such as a stakeholder pension. The growth of fund supermarkets in recent years has meant the cost of investing in a SIPP has fallen dramatically, often comparable with that of a Stocks and Shares ISA. If you are considering investing in a Stocks and Shares ISA read our guide – The best stocks and shares investment ISA (& the cheapest fund platform).
Should I consider investing in a SIPP pension?
If you are currently in a company pension scheme, particularly one where your employer makes contributions then you will probably be better off remaining in that scheme. If, however, you are investing directly into a personal pension via a pension provider then you may want to consider moving to a Self Invested Personal Pension (SIPP) especially if you are comfortable with choosing your own SIPP funds and regularly monitoring them.
If you wish to learn how to choose which funds to buy and when, even if you are a complete novice, then read my FREE short series of emails which teaches you how. It takes just 2 minutes a day and is the result of thousands of hours of research and a career as an investment analyst. You will learn the simple tools and techniques that the very best fund managers use which you can too when DIY investing.
Of course if you would rather someone managed your investments for you there are a number of new managed robo-advice pensions which are listed at the foot of this article. They will invest your money for you. However the rest of this article will assume you are looking to invest your own money in a full SIPP.
What should I look for when choosing a SIPP provider?
If you are simply looking for a cheap SIPP provider then there are a number of pension charges to consider when choosing your SIPP provider. These costs vary depending on what you invest in and how big your pension pot is. Yet the fees charged are only part of the story. Some providers will only allow you to invest in funds, others also offer access to shares and investment trusts. Some cheap SIPP providers offer a basic service while others provide a more comprehensive service including a selection of useful tools and guides to help with your investment research.
The main SIPP charges and costs are:
- Admin fee – this is typically an annual charge. There might also be further charges applied for transferring money in or out of your SIPP (known as SIPP transfer charges)
- Dealing charges – this is a fee charged when dealing in funds or shares and they vary between SIPP providers. You need to make sure the provider you choose has a charging structure that meets your requirements
- Fund manager charges and other fees – fund managers also charge an annual fee. Some SIPP providers negotiate cheaper fund deals and pass this reduction on to their investors. Also check out the fund platform’s full fee list for any extra fees charged before you make your final choice
Below, we include a full SIPP comparison of the costs of each SIPP provider so that you can find the cheapest SIPP provider for the size of your pension pot.
However, as previously mentioned, you shouldn’t just focus on cost but instead consider value for money as well as the level of service provided. If good customer service (including helplines) as well as research and tools are important to you then you need to look beyond cost. A lot of DIY investors require the ability to buy and sell investments quickly and easily online or via an app – so make sure your SIPP provider will let you. Also not all SIPP providers allow you to invest in shares and investment trusts, something the more experienced DIY investor might want to do. So if this is important to you then check your permitted investment choices.
Which is the best SIPP?
The Best SIPP provider for tools & functionality – Hargreaves Lansdown Vantage SIPP
Hargreaves Lansdown Vantage SIPP – click for more details
- reasonably priced and offers excellent investment choice and customer service
- the most popular SIPP in the UK and winner of numerous Best SIPP awards
- excellent website and app enabling you to buy and sell investments quickly and easily
- allows you to invest in shares, unit trusts and investment trusts
- annual admin charge for funds – 0.45% up to £250,000, 0.25% for £250,000 to £1m, then 0.10% above £1m
- separate 0.45% charge for holding shares, applied to the whole account, but capped at £200
- transfer out fee £25 per holding
- can start with a minimum lump sum contribution of £500 or a regular monthly contribution of £25
Popular managed pension for beginners
- one of the few online investment services (robo-adviser) in the market that offers a pension product. Read our full unbiased Nutmeg review.
- ideal for those who want to minimise costs but want someone else to manage the money.
- Nutmeg offers a choice of 10 portfolios with varying levels of risk. The portfolios are managed on a discretionary basis using low cost ETFs which invest in a range of assets.
- Nutmeg charges (on top of the ETF annual charges of course) are: 0.75% for anything under £100,000 invested, then 0.35% on any amount over £100,000
- the minimum initial investment is £5,000 and Nutmeg does accept transfers-in
- Nutmeg helps you choose the right portfolio for you once you register to open a pension.
Which is the cheapest SIPP provider?
If you are just interested in low cost SIPPs then use our SIPP charges comparison table below to compare UK SIPP providers and find the cheapest SIPP for your portfolio size. Our calculator takes into account the SIPP fees applied to portfolios ranging in size from £5,000 to £1million to help you find the cheapest SIPP.
The cheapest SIPP for most people – A J Bell Youinvest
A J Bell Youinvest – click for more details
- annual charge for funds at 0.25% up to £250,000, 0.10% for £250,000 up to £1m, 0.05% for £1m – £2m, no charge over £2m investment
- fund dealing is a flat fee of £1.50 online
- share dealing is £9.95 per deal for zero to nine deals, and £4.95 per deal for 10 or more deals in the previous month
- £25 for one-off income payment, £100 p.a. for regular payments
Fidelity SIPP – click for more details
- a low cost SIPP
- no set up or annual fees
- just the annual fund admin fee is applied at £45 p.a. flat fee up to £7500 then 0.35% up to £250K, then 0.2% on larger portfolios but capped at £2000, fee paid monthly in arrears
- Online service not as slick as the likes of Hargreaves Vantage SIPP.
Alliance Trust and Savings
- monthly admin charge of £17.50 + vat for ‘Savings’, £23.75 + vat for ‘Income’
- buying or selling investment online £9.99 per deal
- transfer out fee £150 plus vat maximum
- annual charge for funds and shares of 0.30% up to £250,000 and 0.20% from £250,001 to £1m, no charge over £1m
- fund dealing is free while share deals will cost you £7.50 per deal
- transfer out fee is £25 per asset transferred
- annual account charge of £100 + vat waived if combined assets across the platform of £30,000
- annual charge for funds and shares at 0.25%
- fund dealing is free, share trades online £11.50 per trade
- transfer out fee £10 + vat per holding
- annual admin fee of £96
- annual charge for funds £80 per year to use on trades
- fund dealing and share dealing charge of £10 per trade
- annual admin fee £0 to £50,000 – 0.30%, £50,001 to £250,000, over £250,000 – 0.15% capped at £250 per qtr.
- fund dealing free, share dealing £11.75 or £6 if more than 20 deals per month per customer
- transfer out fee £15 per holding
The Share Centre
- annual admin fee £12 + vat per month.
- standard dealing fee of 1% with a minimum of £7.50, more frequent traders £7.50 a trade
- Transferring in is free, transfer out £100 + vat
The cheapest SIPP provider comparison table
If you are only focused on getting the cheapest SIPP then below is a table of SIPP charges compared for all the major SIPP providers. Simply look at the column that most closely matches the size of your pension pot for an estimate of the annual cost if your SIPP was held with each fund platform.
SIPP charges comparison table
|Fund Buy or Sell costs||£5,000 portfolio||£15,000 portfolio||£25,000 portfolio||£50,000 portfolio||£100,000 portfolio||£250,000 portfolio||£500,000 portfolio||£1,000,000 portfolio|
|A J Bell Youinvest||£1.50||£43||£78||£93||£155||£280||£655||£905||£1,405|
|Alliance Trust Savings||£10.0||£472||£472||£472||£472||£472||£472||£472||£472|
|Charles Stanley Direct||Free||£133||£158||£183||£125||£250||£625||£1,125||£1,875|
|Close Brothers A.M. Self Directed Service||Free||£13||£38||£63||£125||£250||£625||£1,250||£2,500|
|Halifax Share Dealing||£12.5||£340||£340||£340||£430||£430||£430||£430||£430|
|James Hay Modular iPlan||Free||£188||£213||£238||£300||£425||£625||£1,000||£2,000|
|Selftrade||11.75 on sell only||£252||£282||£312||£387||£512||£887||£1,237||£1,237|
|The Share Centre||1% or £7.50||£323||£323||£373||£498||£748||£1,498||£2,748||£5,248|
the table assumes you only invest in funds and make 10 fund switches a year
Cheapest Robo-advice pension (managed pensions)
There has been an explosion in the number of online only companies offering managed investment services. These so-called robo-advisers tend to focus on offering their services via a stocks and shares ISA. However, a couple now offer a pension product and a number of others including Moneyfarm are planning to launch their own pension products. The table below compares the cost of the robo-advice pensions currently available. The difference between these managed pensions and the SIPPs listed in the table above is that the robo-advice companies below run your money for you whereas the above SIPPs require you to pick your own investments yourself:
|£5,000 portfolio||£15,000 portfolio||£25,000 portfolio||£50,000 portfolio||£100,000 portfolio||£250,000 portfolio||£500,000 portfolio||£1,000,000 portfolio|
|Nutmeg fully managed||£38||£113||£188||£375||£350||£875||£1,750||£3,500|