Best SIPP provider to reduce tax liability after redundancy

[TheGander]

Due to redundancy this is an unusually high tax year for me. I’m interested in opening a SIPP to help reduce tax liability. I’ve never done this before always having paid into the NHS pension. I have a Vanguard ISA and for simplicity‘a sake I’m thinking of getting a Vanguard SIPP, but should I be considering another provider? I’m not going to be interested in buying and selling shares as that’s not my forte, I basically want to buy and forget. Thanks for any advice.

I don't know about vanguard for comparison. I am with aj bell they are low fees and have features which help you choose the funds. Or the government one Nest is actually recommended and may suit you if you don't want choice of funds as its a more off the peg option.

Are you looking to do the investing within the SIPP yourself or have the investments managed for you ( based on your attitude to risk ) ?

money saving exert website recommends 5 companies for the former and 3 I think for the latter.

It will depend on the value invested and the fee structures - there are guides online for best buys

Vanguard promotes itself as being low cost and has a lot of funds to choose from. If you've already got an ISA with them, are you happy with their customer service and fees? As others have said, you can search for fee comparisons with other providers online eg Interactive Investor, AJ Bell, Fidelity, Hargreaves Lansdown.

Some of Vanguard's funds are actively managed eg LifeStrategy where they have options for 100% shares or 80%, 60% etc. But they also have funds which are index trackers if that's your preference.

You know the first £30k redundancy payment is tax-free, right?

Mine is vanguard, my workplace one is Nest, both are doing ok. Remember some redundancy is tax free

Thanks everyone. Yes I remembered the first £30000 is free. I actually used AI ( which I generally avoid due to environmental issues) but it explained things clearly. I’m thinking of putting £30000 in. I don’t want it have to pick shares and worry about performance day to day. Not sure if actively managed is worth it for the performance? I listen a lot to Meaningful Money and Pete Matthew is pretty clear about avoiding actively managed ( if I remember correctly). I didn’t know about Nest, I’ll have a look.

Copy&pasted from money saving expert site regarding managed sipps…

Want it simple and choices made for you? On Martin's ITV show, financial planners Andrew Pye (Just Financial Planning) and Nick Hutchings (rockwealth Reading Ltd) said if you want to keep things as simple as possible, look for providers offering ready-made portfolios. Here you answer a few questions about your goals and attitude to risk, and you’re matched to a portfolio that’s then managed on your behalf. They highlighted:

• AJ Bell Ready-made Pension: offers three options you can choose from: 'cautious', 'pension builder' and 'adventurous'.
• Interactive Investor Managed Portfolios: you answer questions then you’re matched to one of 10 managed portfolios.
• Vanguard Managed Personal Pension (SIPP): offers five risk levels from very cautious to very adventurous.

With the options above, you won’t need to pick individual investments. They're designed to be low-hassle, diversified and professionally managed.

Brilliant @tanstaafl I'm going to do a comparison and work out what the fees would be with the different providers

Avoid Nest as they work out quite expensive. I would recommend AJBell or interactive investor. Vanguard are not particularly cheap for small pots so it depends on how much you intend to contribute.

Halifax SIPP is admin fee free at the moment. You do pay for fund trades unless set up as a regular investment. Passive target retirement date funds could be a simple starting option.

Have you taken advice on the level of contribution from an IFA or accountant? You sound like a high earner in the NHS, you may fall foul of the annual allowance with such a large contribution into a personal pension depending on the level of your NHS pension scheme input. The £30,000 contribution may not be the no brainer you think it is if you end up with an annual allowance charge.

The problem is, the NHS scheme won't tell you input until its too late, but you can get a steer by looking at previous years.

Just a gripe I have with the industry, all these providers calling their personal pension a SIPP when it doesn't offer individual shares, property and DFM portfolios etc. urgh. SIPP has become a byword for pension these days when it used to actually mean something!

Vanguard is perfect if you want to buy and forget. They have a small number of funds and fees are low.

@Everanewbie you are much more clued up than me. I’m not sure what you mean by annual allowance. Is it the tax free nil rate band? I’m not a high earner, I’m a band 7 clinician but 4 months of salary, plus redundancy, plus 3 months of NHS pension when I turn 60 means this is an unusually high earning year which is very unlikely to ever be repeated.