Latest news with #Sipps
Times
10 hours ago
- Business
- Times
Top of the pension pots: the best place for your Sipp
B arclays Smart Investor and Fidelity International have been crowned the top investment platforms for self-invested personal pensions (Sipps) by the consumer group Which?. Which? compared charges across 18 platforms for seven different sizes of pension pot, from £25,000 to £1 million. It also asked about 3,000 customersto rank firms on their customer service and value for money. Sipps give savers control over how their retirement savings are invested, with a broad range of options to invest in, including regulated and unregulated products. Since their introduction in 1989, Sipps have soared in popularity, particularly since 2015, when it became possible to leave your pension money invested after you retire. The Financial Conduct Authority, the City regulator, said more than 1.7 million people held a total of £205 billion in Sipps in 2023.
Daily Mail
23-04-2025
- Business
- Daily Mail
Sipp and Isa cashback offers: How to BOOST your savings early in the tax year
Products featured in this article are independently selected by This is Money's specialist journalists. If you open an account using links which have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence. Investing platforms have introduced a raft of new tax year cashback offers that give investors the potential to boost their pots by up to £5,000. This includes cashback from the likes of Charles Stanley Direct*, Interactive Investor*, InvestEngine* and Nutmeg. Meanwhile, Hargreaves Lansdown* is offering reduced account fees and Fidelity* is running a prize draw to encourage people to invest. Now the new tax year is here, you can start putting refreshed tax allowances to good use. It's important to look into your options carefully and choose the best platform for you, rather than picking one solely based on cashback. For example, check the fees to make sure you're getting a good deal based on the size of your portfolio and how often you want to trade. You should also consider whether you want to pick your own investments or have a service do it for you. Read our full guide to the best investing platforms and Isas to discover costs and features from the major players. Who's offering cashback on Isas and Sipps? We reveal current Sipp and Isa cashback offers below. You should check when the deals end and when you need to deposit or transfer by. Make sure you register using the relevant sign-up forms and read the terms and conditions of the deal. Interactive Investor* – cashback for smaller pots II is offering £100 cashback for new customers who open an Interactive Investor Isa* and transfer or deposit at least £5,000. It is also offering £250 cashback for Interactive Investor Sipps* for new and existing customers who open and fund a pension with £10,000 minimum. Pension transfers count, too. This cashback's not available for existing customers who already have an Interactive Investor Sipp. You should get the cashback into your Interactive Investor account within 30 days of qualifying. When do you have to act by? The cashback deals end on 30 April 2025, so you have to deposit or request to transfer by then. This is Money says: If you want to choose your own investments and have smaller amounts to invest, Interactive Investor's cashback deals are a good option and this is a nice bit of cashback. Nutmeg – cashback as a percentage of your pot Nutmeg's offering 1 per cent cashback on the value of your transfers, across Isas, pensions, Lifetime Isas and Junior Isas. The minimum you can transfer is £10,000 and you'll get cashback on the first £500,000, so £5,000 is the most you can receive. Both new customers and existing customers are eligible for the deal. The cashback's paid into your Nutmeg account. When do you have to act by? You need to start the transfer by 30 May 2025 and keep your money invested with Nutmeg until 30 May 2026. This is Money says: If you prefer a service that chooses investments for you, Nutmeg's cashback looks attractive. And because it's offering 1 per cent of the amount you invest, it's a good cashback option for pots of various sizes. Hargreaves Lansdown* – reduced account fees for six months This isn't a cashback offer from Hargreaves Lansdown, but a 40 per cent reduction in fees between July and December means your pot will still get a boost. You need to open or transfer an Isa or Sipp with at least £10,000 to qualify for the deal. When do you have to act by? The offer runs from 16 April to 30 June. This is Money says: Hargreaves Lansdown's account charge is usually 0.45 per cent for investments up to £250,000, which reduces to 0.27 per cent for six months with this offer. If you have £50,000 you'll save £45 in fees. Charles Stanley Direct* – fee waiver on larger pots You can get up to £1,500 for transferring investments held in Isas and pensions to Charles Stanley Direct. To get the cashback, you have to send Charles Stanley Direct a message titled 'Cashback' on its online platform or through its app. Cashback is paid into your investment account after you've held the transferred investments with Charles Stanley Direct for 12 months. Move more than £200,000 and you will also get account fees waived for six months. When do you have to act by? There isn't currently a deadline for the offer. This is Money says: If investors looking for cashback miss out on any time-limited deals, they could check out Charles Stanley Direct. For those transferring larger pots, the platform fee waiver equates to a £300 saving. InvestEngine* – lower cashback but fee-free New and existing customers at InvestEngine* can get up to £4,000 cashback, although you need a large pot to get that amount. Sipp top-ups and Isa transfers count towards the total deposit for both new customers and existing customers. For new customers, Isa top-ups also count. InvestEngine says it will pay cashback into its accounts in July. InvestEngine cashback offer Investment amount Cashback £12,000 - £24,999 £50 £25,000 - £99,999 £150 £100,000 - £249,999 £300 £250,000 - £499,999 £550 £500,000 - £1,249,999 £1,100 £1,250,000 - £2,999,999 £3,500 £3,000,000 £4,000 Source: InvestEngine When do you have to act by? The offer is available on deposits made until 31 May 2025. This is Money says: This cashback deal is better for people who are new to InvestEngine, because for them both Isa transfers and top-ups count towards the total amount deposited. More cashback is available on lower deposits elsewhere, but unlike other services InvestEngine doesn't charge platform fees. It's worth considering for low-cost do-it-yourself investing in Exchange Traded Funds (ETFs). Are there any other offers? Santander's offering between £50 and £1,000 in cashback when you invest in its Sipp by either transferring a pension or opening a new one. You have to invest or request to transfer by 25 April 2025. As a high street bank, Santander could be a good option for cashback for those who prefer established names. Finally Fidelity* is running a prize draw. If you invest £5,000 or more by 31 May 2025, you could win the value of what you invested, up to £20,000. Compare the best DIY investing platforms Investing online is simple, cheap and can be done from your computer, tablet or phone at a time and place that suits you. When it comes to choosing a DIY investing platform, stocks & shares Isa, self invested personal pension, or a general investing account, the range of options might seem overwhelming. > This is Money's full guide to the best investing platforms Every provider has a slightly different offering, charging more or less for trading or holding shares and giving access to a different range of stocks, funds and investment trusts. When weighing up the right one for you, it's important to to look at the service that it offers, along with administration charges and dealing fees, plus any other extra costs. We highlight the main players in the table below but would advise doing your own research and considering the points in our full guide to the best investment accounts. Charles Stanley Direct * 0.30% Min platform fee of £60, max of £600. £100 back in free trades per year £4 £10 Free for funds n/a More details Etoro* Free Stocks, investment trusts and ETFs. Limited Isa, no Sipp. Not available Free n/a n/a More details Fidelity * 0.35% on funds £7.50 per month up to £25,000 or 0.35% with regular savings plan. Free £7.50 Free funds £1.50 shares, trusts ETFs £1.50 More details Freetrade * Basic account free, Standard with Isa £5.99, Plus £11.99 Stocks, investment trusts and ETFs. No funds Free n/a n/a More details Hargreaves Lansdown * 0.45% Capped at £45 for shares, trusts, ETFs Free £11.95 Free Free More details Interactive Investor* £4.99 per month under £50k, £11.99 above, £10 extra for Sipp Free trade worth £3.99 per month (does not apply to £4.99 plan) £3.99 £3.99 Free £0.99 More details InvestEngine * Free Only ETFs. Managed service is 0.25% Not available Free Free Free More details iWeb Free £5 £5 n/a 2%, max £5 More details Trading 212* Free Stocks, investment trusts and ETFs. Not available Free n/a Free More details Vanguard Only Vanguard's own products 0.15% Only Vanguard funds Free Free only Vanguard ETFs Free n/a More details
Telegraph
04-03-2025
- Business
- Telegraph
‘Should I splurge my pension at 60 to dodge inheritance tax?'
Write to Pensions Doctor with your pension problem: pensionsdoctor@ Columns are published weekly. Dear Charlene, The principal reason for making contact was to seek your thoughts on how the inheritance tax changes announced last October have changed views regarding the timing of drawing of pensions. The commonly accepted wisdom previously was that one should draw on pensions once other savings has been exhausted due to the inheritance tax exemption. I appreciate there were other considerations to consider (such as reaching age 75), tax position and family circumstances. Does this 'draw last' mantra fall away post the introduction of the tax changes? Or does the tax wrapper of Sipps still encourage individuals to draw on their savings last? In the event there was a choice to draw on Isas vs Sipps, should the former still be drawn first? On a separate point, I have a defined benefit pension scheme. I am turning 60 next year, which would be the normal retirement age for the scheme. Do the changes in inheritance tax alter the approach to drawing on the pension and whether someone should delay taking it? Many thanks, – Chris Dear Chris, The proposed changes to pensions and inheritance tax are not yet finalised. The consultation on how the initial proposals might work closed in January, and the Government received significant feedback and concerns. One thing is clear though – the Government wants to encourage people to use their pensions in retirement, rather than leaving them untouched as a way of passing on wealth free of inheritance tax. While it's difficult to second guess how the changes might work, they've certainly got people thinking about the order in which they might want to access their retirement savings. At this point in time, there isn't enough information to give you a precise answer, so I've set out the general situation and my thoughts. Inheritance tax considerations Even with the proposed changes, most people will not leave estates with an inheritance tax liability. Married couples will usually have up to £1m that can be sheltered from the tax between them, thanks to spousal exemptions and the combined effects of the nil-rate bands on offer. Inheritance tax usually applies at 40pc on assets above available allowance and exemptions. The nil-rate band is £325,000 per person, with up to £175,000 available as an additional residence nil-rate band for people who leave their property to a direct descendant. This starts to get tapered away for the highest-value estates (more than £2m). If you have a spouse or civil partner, they'll also inherit an additional Isa allowance, called the 'additional permitted subscription'. This means you can pass on not just the total wealth in your Isas to them, but the value of the tax-free wrapper too. Accessing your pensions You can usually take up to 25pc of the value of your pension(s) tax-free (subject to the overall lump sum allowance of £268,275), with withdrawals above this subject to income tax at your marginal rate. Defined contribution schemes let you buy an annuity with the remaining pension pot to give you a secure, guaranteed income for life or leave funds invested to drawdown which you can withdraw from as and when you need to. Alternatively, you can access chunks of you pension at a time, with 25pc tax-free and the remaining 75pc taxable. Your defined benefit pension will pay you an income based on your salary and your length of service. You'll also be able to up to 25pc tax-free, although it varies between schemes as to how this affects the starting pension income you receive. It'll be up to your scheme whether you can defer taking this pension. If they allow it, you'll need to understand if they pay you arrears or whether you'll benefit from a higher pension when it does start, but you'll need to work out whether this extra money will make up for the years you won't be getting the income for and to factor in the tax consequences. From an inheritance tax point of view, this scheme has no 'pot', so there is little benefit in not taking it. The main consideration will be your other income and the rate of income tax you'll pay. It will also usually pay a pension to your spouse or dependant if you die. This would not form part of your estate under the pensions and inheritance tax proposals in the same way as an unused pension pot. It's also worth keeping in mind that you'll be able to claim any state pension from age 66 which, although paid gross, also counts towards your total income for tax purposes. Spending in retirement As you've mentioned, what to do with any income from your pensions and other accounts really does depend on your personal situation, what you'd like from retirement, and making sure you don't leave yourself short in funding that first. Under the inheritance tax proposals, it will make sense for most people to take their tax-free cash from their pension pots before they turn 75. Plenty of people already do that, and often have plans for all or some of the money. What they don't spend stays within their estate when working out inheritance tax – just like it would in an unused pension pot under the inheritance tax proposals. But if the money was kept within the pension, the beneficiary will (also) pay income tax when they take it out, if the original pension holder dies after reaching age 75. This potential double taxation is a big area of concern with the current proposals. Rather than exhausting one type of account before the other, a blended approach (between pensions, Isas and any other investments) will help you make the most of the tax allowances on offer through your retirement, and perhaps mean you can help your loved ones, too. As all Isa withdrawals will be tax-free, on the face of it, using Isas to supplement your income after taking tax-free cash seems like the obvious place to start to keep more of your withdrawals. But if you are worried about inheritance tax, then taking income from your pension(s) too could help you to reduce the value of your estate, help you spend more on yourself to get the most from retirement, and even make gifts to loved ones. Remember that taking pension income withdrawals (above your tax-free cash) could mean you tip into a higher income tax bracket. Some people are considering giving away their taxed pension income as gifts to help their children make extra pension contributions. Not only does the child's retirement pot get a boost, but they'll also get tax relief on the money paid in, which could in some cases cancel out (or even be worth more than) the income tax you paid on the way out. Making gifts and inheritance tax rules can be complex though, so it's an area I would suggest you get some professional advice on to avoid any costly mistakes. What you can do now While we wait for the new rules, there are a couple of things you can do. The first is to review your pension nominations. Nominating a pension beneficiary gives them the option to move anything they inherit from you into their own pensions, rather than being left with a lump sum option. It's also worth reviewing your will and considering setting up a power of attorney. If you're still unsure of the best path when we get more information on the proposals, I'd really recommend getting some qualified financial advice to put your mind at rest. Best wishes, – Charlene Charlene Young is a pensions and savings expert at online investment platform AJ Bell. Her columns should not be taken as advice or as a personal recommendation, but as a starting point for readers to undertake their own further research.
