I am 53 and want to start SIPP

[JuJulemon]

I am looking for a SIPP with regular contributions of £25-£50 per month and low maintenance fees. On top of the regular contributions, I am also going to put as much money as I manage to save up every year.

My research has brought me to AJ Bell Youinvest, so I am about to sign up. Or should I look around more...??

My brief background:
I pay a state pension in the UK and in my home country (so two state pensions). I have £20k savings (ISA). My husband and I own a flat in London (still paying for the mortgage). He has his own private pension pot and investments. I have been a housewife for a long time, so I have nothing other than state pensions, hence panicking now.

Any advice would be greatly appreciated.

What is in the Dodl SIPP fund?

I am a fan of low-fee index trackers, they're not for everyone but if you're investing over the long term, they can be a good choice.

I opened my SIPP and ISA with Vanguard, put everything into the FTSE Global All Cap and am leaving it to do its thing.

Low-fee index trackers sound interesting, but I'm unsure if I can handle them. I suppose I should go for Dodl's pension builder fund, as I have no clue where to start....

There’s nothing to do, that’s why it is known as passive investing. The fund tracks an index which reviews its holdings periodically and the fund manager then just buys and sells accordingly. Hence the low fees which really help with compounding. You just invest and wait.

If you’re completely new to investing you might want to watch the rebel finance school videos on YouTube. They are very accessible for people starting out.

The key thing is to avoid high fees.

As well as Rebel Finance, there's also this group. Quite new so there's not much content on there yet but its a sound intro. https://www.thefireplace.info/wiki/Main_Page

The people who run it were associated with Rebel Finance for a while but left over creative differences. They have a slightly different approach, but definitely know their stuff.

Vanguard is appealing, but they aren't as cost-effective as I wish, as my pot is smaller than £32k😭So for now, Dodl will be one of the cheapest options to me.

I opened my first SIPP account with Dodl last night. I just made an one off payment and didn't set up a monthly payment to leave me flexibility when and how much to add.

Earlier today, I was about to invest in their pension builder fund. I was going to invest 70% of my fund, but DH said I should put all the money in them. In SIPP, people usually invest all? Or leave some in the fund?

I will look at the Rebel Finance School videos as well as the link shared above. Thank you for sharing.

I came on to vote for Vanguard. Very low fees, great, well established firm and outstanding customer service. I've been with them in the US for decades. You cannot go wrong with Vanguard.

I only hear good things about Vanguard, but when I looked at them, their cost wasn't as low as I expected. It may be because my pot is tiny...

Quick research says;
Dodl is often cheaper for smaller pots (under £32k) due to Vanguard's £4/month minimum.

I might consider transferring when my pot grows...

When I first started Dodl was definitely the cheapest for a small pot. I also agree with DH that you should invest most of your cash. However you do need to keep a bit in to cover the fees which are taken monthly. If I were you I would work out 0.15% of your pot and leave that in there as cash. They won’t take it all in one month but at least you won’t need to remember to check there is enough cash in every month.

Vanguard raised their fees for small pots last year.

No point having money sitting in a SIPP but not invested, beyond what's needed for fees.

I moved my pension away form Vanguard because (amongst other reasons) their fees were higher for pensions over £85k. They've got a reputation for being low cost but there are cheaper SIPP providers and efts.

They cap their fees at £375 a year.

I recently opened a new pension because I’ve gone freelance and want to make one off payments easily. After a lot of research I went with Vanguard; I know the fees will be relatively higher for the first 32k or whatever, but really we’re still talking a low amount and once over the low fund barrier, they will work out cheaper. If the fund performs well I will probably transfer some or all of my old company pension over, which will certainly mean reduced proportional fees so I feel both short term and long term that Vanguard is the best bet for me.

I know - still more expensive

Interactive investor is 14:99/month which is £180/per year unlimited funds, including Sipps (£5:99/month for portfolios under £100k) as opposed to the £375 Vanguard will charge me. Invest Engine don’t charge any fees but they don’t accept company funds, which is needed for those of us who are company directors. Don’t assume Vanguard are the cheapest or the best. Go with what suits your situation.

I think you also have to look long term and assume there will be growth. In my situation, there were a couple of other options alongside Vanguard which were similar, but once you add in growth, Vanguard soon becomes more competitive because they cap fees.

ETA: Just looked at Interactive Investor and interested to see they have reduced their highest fee by about a third - that's great. May consider moving!

Interactive Investor Core plan (under 100k) is £5.99 from 1st Feb. Includes SIPP. I've just had an email yesterday about it.

ETA: I've just read your message properly and seen you've said that!

I’ve never used them but I thought Vanguard limit you to their own funds rather than having access to the full market. I think Dodl to start with and then either AJBell or interactive investor are much more valuable. Ii particularly give you access to their very lively helpful and well read community who are forever helping each other out. I have done really well over the last 12 months and gained massively in confidence.

The Vanguard platform has a very limited range of funds - only their own, and not the full range of those. Which can be a benefit for new investors who find too much choice confusing.

Pretty much everyone has done really well over the last 12 months. The testing times are ahead and that’s when it’s really important to understand the difference between volatility and risk.

Just wanted to add to this about fees for UK investors:
Vanguard US is owned by its US investors. There are no outside owners or stockbrokers, meaning there's no need to generate profit for anyone other than its US clients.

This is not the case for UK investors where the structure is different. Vanguard Asset Management Ltd UK is a wholly owned subsidiary of its parent US company. UK investors do not legally own a slice of the parent company.

I don't know whether UK investors are part of the mutual structure or not. Its purpose isn't to "generate profits" for anyone. Its purpose is to provide sound, low-cost investments to benefit its investors.

I've held Vanguard investments in the US for 30 years, so I am part of the mutual structure, and have yet to see any "profits" other than my investments increasing in value.

https://corporate.vanguard.com/content/corporatesite/us/en/corp/about-our-funds/how-we-invest/investor-outcomes.html

Yes, this is true for US investors - it is a mutual structure. Small investors pay a very small platform fee (in some cases no platform fee at all) due to this structure.

The point I was making was that this isn't the case in the UK - It's not mutually owned. Vanguard UK pricing structure is proportionally much higher for smaller investors than those investing amounts over £32K.
It does mean that for small investors or those just starting on their investing journey, it is unlikely to be as attractive as some other platforms when considering fees.

There was much consternation when this new fee structure was introduced as it did seem to be a move away from the original philosophy of the Vanguard brand of simple low cost investing.