The charges levied on a SIPP are numerous, vary
from provider to provider and can really be quite
substantial. Hence it is very important that a
potential investor knows what they are getting themselves into
before committing to such an investment.
SIPP providers will usually impose both a set up
charge and an annual administration fee. A typical set up fee
would be between £250 and £350 and a typical yearly administration
charge would be between £400 and £500. The extent of such
charges can however vary between both providers and the size of the
individual's initial investment or fund value.
Q & A's
A SIPP provider is likely to charge in the region of £450
to £750 for each property transaction and charge an annual
property fee of between £400 and £650. Then there are
legal fees and stamp duty on purchases made by the pension fund,
plus mortgage charges. In the case of foreign property purchase
(holiday homes for example), there may also be foreign taxes to
pay.
These charges are of course in addition to the initial set up
fee and annual administration charge.
It is relatively common for a SIPP provider to impose a charge
for transferring benefits both in and out of a SIPP.
It is very likely they will. There are commissions to be paid
and costs involved with buying and selling investments, and
switching funds. For example, a SIPP will pay stamp duty and stamp
duty reserve tax on UK equity purchases.
I am afraid so, a typical charge would be between £50 and
£80 although as with all SIPP charges, these can vary between
providers. You may also be charged a one-off payment simply for
receiving your pension.
It is common for a SIPP investor to have to pay both a setting
up fee for income drawdown and an annual fee simply for paying it.
Setting up fees typically range from £50 to £100 and
annual payment fees from £100 to £200.
If carrying out the efficient administration and investment of
your SIPP leads to electronic banking methods being employed (for
example, BACS), there could be a charge levied on each individual
transaction. Such charges should however be relatively trivial.
Failed payments and the setting up of direct debits/standing
orders usually also create a charge.
It is very likely they will. A typical charge would be
£100.
If you seek and obtain financial advice relating to your SIPP
investments, the costs of this can be claimed from the fund,
charged on a deal by deal basis.
