Imagine, if you will, someone who has a 'Final Salary Scheme' pension
with his employer but the fund is in severe deficit which seems to be
growing year by year. Imagine also that the employee is worried that
the company might default at some point and fail to make up the
deficit. imagine that at the moment the employee can withdraw 100% of
his (actuarily calculated) pot and put it into a SIPP.

If he does this, and invest in stocks and shares etc. in the SIPP,
how safe is that investment? Is it possible for the SIPP management
company to default in some way or is his investment 'ring fenced' in
some way?

many thanks for any views on this

Robert

"RobertL" wrote in message
...


Imagine, if you will, someone who has a 'Final Salary Scheme' pension
with his employer but the fund is in severe deficit which seems to be
growing year by year. Imagine also that the employee is worried that
the company might default at some point and fail to make up the
deficit. imagine that at the moment the employee can withdraw 100% of
his (actuarily calculated) pot and put it into a SIPP.

If he does this, and invest in stocks and shares etc. in the SIPP,
how safe is that investment? Is it possible for the SIPP management
company to default in some way or is his investment 'ring fenced' in
some way?

The SIPP is 100% safe wrt the "ownership" of the funds. It is however not
guaranteed to give to a positive return and may return a negative amount,
especially after management fees which can be significant for small amounts.
Small in SIPP terms is perhaps less than 50-100K.

tim

On Jan 14, 4:19*pm, "tim...." wrote:
"RobertL" wrote in message

...



Imagine, if you will, *someone who has a 'Final Salary Scheme' pension
with his employer but the fund is in severe deficit which seems to be
growing year by year. *Imagine also that the employee is worried that
the company might default at some point and fail to make up the
deficit. *imagine that at the moment the employee can withdraw 100% of
his (actuarily calculated) pot and put it into a SIPP.

If he does this, and invest in stocks and shares etc. in the SIPP,
how safe is that investment? * Is it possible for the SIPP management
company to default in some way or is his investment 'ring fenced' in
some way?

The SIPP is 100% safe wrt the "ownership" of the funds. *It is however not
guaranteed to give to a positive return and may return a negative amount,
especially after management fees which can be significant for small amounts.
Small in SIPP terms is perhaps less than 50-100K.

tim


thank you, yes, the typically fixed annual fee means that these
things are only sensible if the fund is reasonably large. they don't
guard against poor investment decisions either, as you point out.

Robert

RobertL wrote:

Imagine, if you will, someone who has a 'Final Salary Scheme' pension
with his employer but the fund is in severe deficit which seems to be
growing year by year. Imagine also that the employee is worried that
the company might default at some point and fail to make up the
deficit. imagine that at the moment the employee can withdraw 100% of
his (actuarily calculated) pot and put it into a SIPP.

If he does this, and invest in stocks and shares etc. in the SIPP,
how safe is that investment? Is it possible for the SIPP management
company to default in some way or is his investment 'ring fenced' in
some way?

many thanks for any views on this

Robert

You appear to be specifying a SIPP as the only option. What about an
ordinary personal pension? The pension plan is basically safe even if
the provider went under (the provider does not actually 'own' the
pension), but the funds themselves have a riosk element that depends on
which funds they are. If you wanted low or no risk then you could choose
a cash fund (but the returns would likely be abysmal).

Plus the charges are likely to be less than with a SIPP.

Rob Graham

"RobertL" wrote in message
...
The SIPP is 100% safe wrt the "ownership" of the funds. It is
however not
guaranteed to give to a positive return and may return a negative
amount,
especially after management fees which can be significant for
small amounts.
Small in SIPP terms is perhaps less than 50-100K.

thank you, yes, the typically fixed annual fee means that these
things are only sensible if the fund is reasonably large. they
don't
guard against poor investment decisions either, as you point out.

Go for one without a fixed annual management fee, eg Hargreaves
Landsdown. I think others like sippdeal have reasonable charges too.

--
Andy

"tim...." wrote in message
...

"RobertL" wrote in message
...


Imagine, if you will, someone who has a 'Final Salary Scheme'
pension
with his employer but the fund is in severe deficit which seems to
be
growing year by year. Imagine also that the employee is worried
that
the company might default at some point and fail to make up the
deficit. imagine that at the moment the employee can withdraw 100%
of
his (actuarily calculated) pot and put it into a SIPP.

If he does this, and invest in stocks and shares etc. in the SIPP,
how safe is that investment? Is it possible for the SIPP
management
company to default in some way or is his investment 'ring fenced'
in
some way?

The SIPP is 100% safe wrt the "ownership" of the funds. It is
however not guaranteed to give to a positive return and may return a
negative amount, especially after management fees which can be
significant for small amounts. Small in SIPP terms is perhaps less
than 50-100K.

My wife has a SIPP with HL - about £10k in it. The charges are
insignificant (in fact there are no charges at the moment other than
the annual charge on the underlying funds).

--
Andy

tim.... wrote:

The SIPP is 100% safe wrt the "ownership" of the funds. It is however not
guaranteed to give to a positive return and may return a negative amount,
especially after management fees which can be significant for small amounts.
Small in SIPP terms is perhaps less than 50-100K.

tim
Just checking I understand - the ownership of the funds is with the
person rather than the SIPP admin company.
So it the admin company goes broke then the SIPP (funds?) still exists
and belongs to the person - I presume its just transferred to another
admin company?

However if the places that the SIPP is invested in - say the whole lot
is in a cash fund - go broke then the usual rules apply - e.g. bank
deposit guarantee?
Have I got it?
mikej

"Mike James" wrote in message
. uk...
tim.... wrote:

The SIPP is 100% safe wrt the "ownership" of the funds. It is however
not guaranteed to give to a positive return and may return a negative
amount, especially after management fees which can be significant for
small amounts. Small in SIPP terms is perhaps less than 50-100K.

tim
Just checking I understand - the ownership of the funds is with the person
rather than the SIPP admin company.
So it the admin company goes broke then the SIPP (funds?) still exists and
belongs to the person - I presume its just transferred to another admin
company?

However if the places that the SIPP is invested in - say the whole lot is
in a cash fund - go broke then the usual rules apply - e.g. bank deposit
guarantee?
Have I got it?

yep, that's how it works

tim

On Jan 15, 12:38*pm, "tim...." wrote:
"Mike James" wrote in message

. uk...





tim.... wrote:

The SIPP is 100% safe wrt the "ownership" of the funds. *It is however
not guaranteed to give to a positive return and may return a negative
amount, especially after management fees which can be significant for
small amounts. Small in SIPP terms is perhaps less than 50-100K.

tim
Just checking I understand - the ownership of the funds is with the person
rather than the SIPP admin company.
So it the admin company goes broke then the SIPP (funds?) still exists and
belongs to the person - I presume its just transferred to another admin
company?

However if the places that the SIPP is invested in - say the whole lot is
in a cash fund - go broke then the usual rules apply - e.g. bank deposit
guarantee?
Have I got it?

yep, that's how it works

Good. i wasn't concerned about the health underlying investments but
rather about the SIPP wrapper provider. The other question I need to
sort out (by reading further) is what happens if the SIPPer dies. I
know there is a possible large tax charge under some circumstances.

Robert

"RobertL" wrote in message
...
On Jan 15, 12:38 pm, "tim...." wrote:
Good. i wasn't concerned about the health underlying investments but
rather about the SIPP wrapper provider. The other question I need to
sort out (by reading further) is what happens if the SIPPer dies. I
know there is a possible large tax charge under some circumstances.

If you haven't vested and are within the lifetime limit (which is very
large) then it goes 100% tax free into the estate AIUI.

--
Andy