To help you choose the best providers, Which? compared the fees they charge and surveyed around 1,900 existing Sipp customers about the level of service they're getting.
Here we explain how a Sipp can give you more control over your retirement savings, and how to choose the right one for you.
The appeal of Sipps
As the name suggests, Sipps are personal pensions that can sit alongside, or incorporate, any workplace pensions you already have.
Which?’s latest analysis focuses on these low-cost DIY Sipps, offered by investment platforms. In general, DIY Sipps give you access to a wide range of assets and investment options, but in some instances, you can only invest in funds, not individual shares.
Standout Sipp providers
Vanguard is joined by Fidelity (75%), a WRP for the third year in a row, Halifax Share Dealing (72%) and Interactive Investor (71%).
Interactive Investor's flat fee of £12.99 a month makes it the cheapest option for most pot sizes. Halifax also has a low fixed charge of £45 per quarter if the Sipp is worth more than £50,000.
How Sipps can save you money
But costs can vary significantly depending on which Sipp provider you choose. A saver with a Sipp worth £268,000 (the average value among Sipp customers we surveyed) would end up with £358,378 in their pot after 10 years if they opt for the cheapest provider (Interactive Investor), assuming annual investment growth of 3%.
With the most expensive Sipp provider (Hargreaves Lansdown), their pot would be worth £345,498 – almost £13,000 less. Over 15 years, the difference would be £21,700 - and that's all down to fees.
Find out more:What to consider before taking the DIY route
Sipps are best suited to savers who have the time and knowledge to pick and monitor their own investments.
According to recent research by adviser review site VouchedFor, the average cost of an adviser combining three pensions worth a total of £500,000 and providing an investment strategy is £8,881, or 1.8%, in initial fees. If you take the DIY route, putting the same £500,000 into a Sipp with Vanguard would incur a platform charge of just £375 (plus fund fees).
While typically more expensive than DIY options, ‘do-it-for-me’ Sipps, which offer ready-made portfolios catering for different risk appetites, are worth considering if you’d like more support with investment decisions but are concerned about the price of financial advice.
source https://www.which.co.uk/news/article/best-diy-pensions-revealed-aR8ku1C4cIGq