Sipps.

This information was provided to us by MW Pensions Ltd. Ethical Forestry do not conduct regulated activity and are not regulated. MW Pensions Ltd is authorised and regulated by the Financial Services Authority for the provision of personal pensions, Ref: 458576. ( to view the FSA Register please click here ).

About SIPPS

SIPPs have been around for some time but have gained in popularity in recent years. This has gathered momentum since A Day, with the result that SIPPs have entered the mainstream.

As the market has grown, it has also changed, with the result that there are different types of SIPP available. See below for details.
There has also been an increase in SIPP Providers. It should be stated that SIPPs are not for everybody and in many instances other types of pension may be more suitable, especially if only limited investment options are required.

Since April 2007 SIPPs have been regulated by the Financial Services Authority. They will no doubt be looking at cases where SIPPs have been recommended wrongly for clients, perhaps on the basis of commission. MW Pensions neither give nor take commission and do not give financial advice

The SIPP is popular because:-
It is a simple structure
There are generous tax benefits
You control your own destiny
There is freedom of investment (but watch the rules)
It is now easier to make substantial contributions
Most people are eligible for one (even babies)
Ideal way to build wealth over the long term in a tax free environment

As the market has grown so it has also changed - as markets always do, with the average fund value dropping. Once, the SIPP was the preserve of the high net-worth individual and whilst that segment of the market continues to grow, the growth in smaller funds is significantly greater. Since the main objective of “simplification” was to get more people to take responsibility for their retirement, this development is unsurprising.

There has been a marked increase in SIPP contributions, with some SIPPs being specifically set up for that purpose

There are a number of different types of SIPP and care should be taken in selecting an appropriate structure.

Full SIPP

This offers the full range of SIPP investments and is not “tied" to any institution like an insurance company or stockbroker. Even so, some such SIPPs will nevertheless not permit "non-standard" investments such as overseas property or unquoted shares.

Hybrid SIPP

These are often insured SIPPs. They often permit investments limited to their own range of funds or products, and therefore lose the full spectrum of investment choice. SIPPs marketed by investment houses often won’t allow property investment.

Online SIPP

Often marketed as a low cost SIPP where all investments are transacted by the member or his adviser online. Often won’t permit, for example, Property investments.

Fees

Some caution should be exercised here. Often ‘headline fees’ (for set up and annual management) may seem very low, or even free, the fee structure can be riddled with transaction charges, fund management costs or commissions, which soon mount up. Some charge for signing cheques! Others pay a poor rate of interest on cash balances, keeping the extra interest as a "hidden" fee.

Interest paid on cash deposits

Recent research has indicated that many SIPP providers are not offering their members a very good rate of interest on cash balances – 1% below base is not untypical. A large proportion of SIPP funds are kept in cash – possibly 25%. This is yet another area where a little homework may bear dividends.

The MW SIPP is a Full SIPP which allows the full range of tax free investments now allowed by HMRC. We charge a fixed fee that includes everything that a member requires on a regular basis. There are no transaction charges, no commissions and no small print. Advisers and clients can elect to place their cash with any recognised banking institution. £1,000 must remain in a SIPP Bank account.