SIPPs are popular among workers who wish to save for retirement. According to the Pensions Advisory Service, SIPPs offer much wider investment options than are generally available for personal and group personal pensions. These further options include quoted UK and overseas stocks and shares, unlisted shares, collective investments, investment trusts and even property or land.
They base this off research carried out by the independent research company Platforum.
Platforum produced an analysis in November 2019, taking the average (median) British pension holder not yet in drawdown, they detailed that the average pot size is £40,500. However, the data that Platforum used was from the ONS which was itself from February 2018.
As such, it may be difficult to determine how accurate this claim is as we move further into 2020.
While each SIPP provider will have different options and types of charges (which can vary on the size of the pot invested), it is possible to roughly gauge how the Vanguard SIPP compares in terms of annual fees.
While this list is not exhaustive, it’s clear to see that while the 0.15 percent fee offered by vanguard is certainly cheap, it is possible to find cheaper options for those with large pension pots.
This should be especially of interest for larger pension holders as the new Vanguard account has a limit of £40,000. SIPPs generally can be a good option for people looking to fund retirement but the government advises that careful consideration should be given before any decisions are made.
According to the Money Advice Service, SIPPs may have higher charges than other types of personal pensions. They detail that for these reasons, SIPPs tend to be more suitable for large funds where the charges will not have a noticeable impact.
They also detail that SIPPs may be more suitable for people who are experienced in investing, due to their large range of investment options.
As they explain, it may be advisable to seek professional advice for this area or consult government backed resources like the Pension Wise service.