9 min Read
07 May 2019

Written by Damien

Damien is one of the most widely quoted money and investment experts in the national press and has made numerous radio & TV appearances. He created MoneytotheMasses.com while working in the City when he became disillusioned with the way the public were left to fend for themselves because they could not afford financial advice.

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When is the Vanguard SIPP launch date – plus Cheaper alternatives

When will the Vanguard SIPP be released

When is the Vanguard SIPP set for launch?

In this article we explain why the Vanguard SIPP launch has been delayed, when it is likely to be launched and reveal how you can effectively have a cheap Vanguard SIPP right now. You can jump straight to the section 'How to get a Vanguard SIPP right now to find out how'.

Vanguard has been promising a pension product for some time now, with investors having to patiently wait it out. Vanguard launched its Vanguard Investor platform in the UK in May 2017, initially offering an ISA, a junior ISA and a general investment, with the promise of a pension product in the not-to-distant future. Fast forward almost two years and the wait for a Vanguard pension goes on.

Why has the Vanguard SIPP been delayed?

Vanguard has been quite open and honest when it comes to the reasons surrounding the delay. In February 2019, Nick Blake, head of personal investing at Vanguard said "To cut to the chase, while we're continuing to make strong headway, we're not quite there, we will only launch the pension once it is tried, tested and meets the high standards Vanguard clients rightfully expect. As a result we've decided to hold off launching the pension until after the busy tax year-end. We will continue to issue updates on our progress through email and the Vanguard Investor website. We will also disclose the full details of the Vanguard Personal Pension in advance of launch, including pricing, to help investors plan accordingly."

When will the Vanguard SIPP be available?

The actual launch date is still unknown, but now the 2018/2019 tax year-end is out of the way, we should expect some news soon and we will be updating this article as soon as we hear more. Vanguard has made it clear that the Vanguard SIPP will only be launched once it has been tried and tested and full details will be released in advance of the launch and as that has failed to materialise (at the time of writing), we are not predicting an imminent launch.

What are the costs of the Vanguard SIPP?

The full details have yet to be announced and so we currently don't know the full costs of the Vanguard SIPP. It is clear however that Vanguard fully intend to stick to their key principles. Vanguard's website states 'just like returns, the impact of costs compounds over time. That's one of the reasons why lower-cost funds have consistently delivered better outcomes for investors over the long term. Vanguard's structure allows us to offer a high-quality investment service at low cost. And that low-cost advantage will compound over time, helping you to reach your goals faster'.

Nick Blake, head of personal investing at Vanguard reiterated this when talking about the costs of the Vanguard SIPP saying "The team here at Vanguard are working hard to provide a high-quality, low-cost pension service designed to serve to and through retirement…and we think you'll be very pleased with the result."

Should I invest in the Vanguard SIPP?

While the Vanguard SIPP is yet to launch in the UK, read our independent Vanguard Investor review, which looks at Vanguard as a platform and how it compares to its competitors. Our independent Vanguard review also looks at the fees, the funds available as well as the fund performance and is an essential read if you are considering investing in the Vanguard SIPP upon launch. If you can't wait until launch then there are a number of ways that you can effectively have a Vanguard SIPP right now. Read on to find out.

How to get a Vanguard SIPP right now

If you like Vanguard funds and are keen to invest in a SIPP then it is possible to create your own Vanguard SIPP by using an alternative platform. In fact, it is likely to be cheaper than investing with Vanguard directly in any event. Interactive Investor  (also known as ii) is the second largest investment platform in the UK and what makes it attractive is that it operates a fixed fee model of £22.50 per quarter (Annual charge of £90). Most platforms will charge a fee based on a percentage of your holding, with Vanguard charging 0.15%. Our research shows that if you hold more than £60,000 in Vanguard funds, then investing via Interactive Investor would actually be cheaper than investing it via the Vanguard Investor platform and the Vanguard SIPP, assuming the fees are 0.15% (in line with their other existing products). Another, less popular but cost-effective SIPP alternative is iWeb but unlike Interactive Investor it does charge exit fees if you decide to move your money away from iWeb in the future.

Vanguard Investor SIPP vs Interactive Investor SIPP

Interactive Investor charges a fixed fee of £22.50 every quarter (totalling £90 a year) regardless of your portfolio size. Vanguard charges a fixed percentage of 0.15% (capped at £250,000, meaning the maximum is £375 per year). There is also an underlying fund charge, but the charge is the same for both Interactive Investor and Vanguard Investor. So, if you intend to invest more than £60,000 into a Vanguard SIPP, then you may as well invest in Vanguard funds through Interactive Investor's SIPP as it will be cheaper.

Of course, if you never plan to hold more than £60,000 in a Vanguard SIPP then you would be better off investing via Vanguard's own SIPP (when it launches) as it would likely be cheaper. However, one of the advantages of investing in an alternative platform such as Interactive Investor is that you are able to invest in a wider range of funds. With Vanguard you are limited to Vanguard's own funds. Additionally, investing in a SIPP using a platform such as Interactive Investor will give you access to thousands of investment trusts, ETFs and unit trusts from hundreds of investment companies, as well as access to direct share dealing.

Summary

If you like Vanguard funds and are considering investing in a Vanguard SIPP then it may be worth considering opening a SIPP with a platform such as Interactive Investor or iWeb and we have summarised the reasons below:

  • You can invest in a SIPP right now (rather than having to wait)
  • If you have £60,000 or more to invest then it will be likely cheaper to invest in Vanguard funds with Interactive Investor or iWeb than with Vanguard Investor directly, based upon Vanguard's existing charging structure.
  • More choice as you are not restricted to just Vanguard funds. Via Interactive Investor or iWeb you can invest in thousands of unit trusts, investment trusts, ETFs and shares.
  • No exit fee with Interactive Investor so if you ultimately decide to invest directly through Vanguard Investor then you can transfer across without penalty. iWeb does charge exit fees, unfortunately.

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