Hi, what is the difference between your own SIPP and the ones already listed? Thanks
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Hi, thereās a lot of people in the UK (including my father) who have a DB pension and would like to transfer it to a SIPP. However, if the value of the DB pension is over Ā£30k, an IFA needs to sign the transfer.
By law, the IFA needs to advise you on the transfer, but they do NOT need to approve it. However, all current SIPP providers will only accept an incoming transfer if the IFA has approved it. This is optional. For example, AJ Bell didnāt require an IFA to approve the transfer up until recently.
Will T212 break this trend and not require the IFA to approve the transfer? My fatherās been trying to transfer his pension for over a year now, speaking to 10+ IFAs who all want to charge 2-3% just to come back and say they donāt approve the transfer. There are thousands of people in the same position. Weāre at the mercy of corrupt IFAs.
Iām curious, why do they not want to approve the transfer?
Is it because they objectively believe that your fathers DB scheme remuneration is better than the equivalent āpot valueā offered?
I just donāt understand why they wouldnāt want to approve it if they get a 2% commission out of it (and they thought it was in the interest of the person), so I just thought Iād ask.
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What do you mean by this? A SIPP is an account for investing for retirement. These 3 companies are companies that offer SIPPS - but these are the shares for these companies.
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The main difference is their pensions exist, while T212 is yet to be released.
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I see, simply linked through the search functionā¦
Why does your father want to move it?
It is widely accepted that with an defined benefit/final salary scheme, itās best to leave it alone and not transfer it to a SIPP. Your retirement benefits will be higher in a DB scheme than a SIPP.
This is because the risks of misselling in this area are so highā¦
Our SIPP will be unique as there will be no fees for the product and you will be able to use many Trading 212-specific features (such as pies and our high interest rates), along with the broad selection of investment options.
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Itās because if the IFAs approve the transfer and you invest your SIPP in investments that decrease in value, the IFAs can technically be sued 10-15 years later.
However, they will never say this as their reason for not approving. They will say some waffle like the benefits are good and the pot value is increasing nicely. This is of course false, the benefits are poor, and the pot value increases 1-2% per year.
For reference, my father already has a SIPP with HL that is worth 3x more than his DB pension and its invested fully in VUAG (which is an S&P 500 accumulating ETF) and its gone up 50% in the last 3 years.
If T212 doesnāt require an IFA to approve the transfer then we can stop this nonsense. The IFAs also now cannot be sued as no approval was given. People should be in control of their own money.
Do you expect a post budget update on this?
Itās all speculation right now, but weāre closely following all the talk around the pension reforms. We will be able to react if there are any changes after the budget is announced.
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Things being āwidely acceptedā doesnāt mean they are correct.
Just playing Devilās advocate.
Is he trying to convert it to an independent SIPP?
You may have more success with a provider if youāre moving to their own DC product. From there you can then move from that product to an independent SIPP.
I think the point is that when @anon24 states
That the pension values are not directly comparable. The DB pension is āworthā a lot more than itās transfer value, hence IFAs being unwilling to suggest itās a good idea
Can we expect an update on SIPP?
Same question here. Now that budget revealed is there any update on the SIPP offering?
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Our aim is to bring the product to market in Q1 2025, and we are doing everything we can to get there! We want to ensure that the product we offer to our customers is competitive yet market-leading so it is important that we get it right.
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By Q1 2025 I take that to be 31st March 2025! Sorry for the cynicism on my part but that is based on years of experience (the is a saying: āDo not trust deadlines based on seasons.ā).
On that basis is your intention to introduce the feature with additional features including ability to transfer-in SIPPs, employer contributions, payment of lump sum pensions etc? Or are you going to start with the basic product, such as only accepting individual payments, and bring-in the other features over time?
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Thanks for the timeline.
Iād rather T212 gets it right than pushes out a sub-par product.
I can understand why folk are getting a little irate though. Iāll be hit with Ā£120 in Sipp fees in April which Iād rather avoid if poss.
Might I suggest teasing some details of the Sipp pre-launch?
It makes the wait more bearable if people know whatās in the pipeline.
To add to @PStaveleyās questions, two features Iām keen on are 0% US withholding tax and multi-currency accounts in Sipps.
I think Iām right in saying both are possible/allowed, but not many brokers seem to offer them without charging an arm and a leg.
Totally agree. 0% US withholding tax and multi-currency are key features.
In-specie transfer also very useful but I expect thatāll come at a later date.