There are numerous fees associated with taking out a SIPP (Self Invested Personal Pension), but they often aren’t that well-known. If you’re thinking about taking out a SIPP, you absolutely need to be fully informed as to what you’re getting into. 

In this article we’re going to run through the common costs and charges associated with SIPPs, so continue reading. 

But first, what is a SIPP?

SIPPs are pension schemes controlled solely by the individual, a kind of DIY pension so to speak. It gives you full control of where your money is going. As opposed to traditional pension schemes where you are limited in terms of where to put your money, SIPPs allow you to freely invest wherever you want. We have more information about SIPPs here.

Here are the main costs associated with SIPPs

Admin fees

Admin fees are annual charges made by your provider and the amount will likely vary depending on who your provider is. Unsuspecting investors are often surprised that they have to pay admin fees because rogue advisers rarely inform them.

Fund management charges

Depending on the level of guidance you need with your investment, you may be required to pay fund managers an annual fee. This is their fee for keeping an eye on your account and your investment. Some SIPP providers will negotiate cheaper fund deals and then pass this reduction onto their investors. 

There are often a variety of management charges, including the following:

  • Monthly administration fee
  • Transferring to an overseas scheme
  • Pension sharing after divorce
  • Payments made of death benefits

Dealing charges

When dealing in funds or shares, there is a dealing charge associated. Make sure that you review the dealing charges outlined in whatever brochures you look at, because like admin fees the amounts will vary depending on the provider.

Government charges

There are also government charges like stamp duties and levies that you can be charged with. These may include the following:

  • Stamp duties
  • Equity buys
  • Trading fees
  • Clearing fees
  • Transaction taxes

Take a look through your brochure to get full details about the kinds of fees you may be placed with. 

Don’t take bad advice for your pension

Now that you’re aware of all the fees involved in a SIPP, you’re ready to make a decision. For more information about pension investments and related news, visit our blog. You can also contact us here, or fill in our quick 30-second enquiry form on our website.