If you’re looking to take control of your retirement savings then a self administered pension plan is likely to be the best choice. Here’s how to compare self invested pensions so you can save for retirement and keep control of your money.
With pension losses and hefty account fees regularly making the headlines you may decide that you’re better off taking the reins and controlling your own personal pension investments.
A SIPP self invested personal pension plan could give you the control over your retirement fund you’ve been looking for.
Here’s how to compare self invest pensions and get the best self invested pension plan for your investment aspirations.
What is a SIPP pension?
A SIPP self invested personal pension is simply a different type of personal pension plan.
It offers the same tax relief as other pension plans but the main difference between self invested pensions and standard personal pensions is the amount of control you have over choosing your investments.
With the majority of personal pensions you may be able to choose the type of fund, and to a certain extent the amount of risk you are willing to take with your pension fund before you hand it over to a fund manager to invest it on your behalf.
However, the investments themselves are out of your hands as the fund manager will deal with strategies and practicalities themselves.
However, with a self administered pension you are in complete control of where and how your money is invested and are free to select each investment yourself or employ a fund manager or stockbroker directly to look after your fund.
This means that you will need to be happy to have a more hands on approach to your pension if you decide to choose a SIPP pension.
If this is not the case you might be better off choosing a standard personal pension fund and leaving the investment decisions to your fund manager.
How much can you invest?
Finding a SIPP that will allow you to invest what you want, when you want and transfer your money from one fund to another as you see fit is essential.
Therefore before you start comparing self invested pensions it makes sense to exclude any accounts that specify minimum monthly or lump sum contribution limits that don't meet your financial requirements.
Once you've done this you'll be able to compare accounts best suited to your pension savings plans and goals, rather than wasting time investigating ones that don't.
Where can you invest?
Different SIPP pension providers will allow you to invest in different markets, different sectors and in different locations worldwide.
If you have decided you want to invest your pension fund in a certain area or global market then you should restrict your search to SIPP provider plans that allow you to do so and exclude those that don’t.
If you haven't decided where to invest yet then you may want to look for a SIPP pension provider with the broadest choice of investment markets to keep your options open until you decide.
Alternately look for one that lets you invest across a broad range of markets and sectors so that you're not restricting your choice at all.
Check the charges
You may expect that a self administered pension would be cheaper to run than a standard personal pension plan, however this is not always the case.
While fees have come down in recent years, the initial set up costs of a SIPP self invested personal pension can be quite costly compared to other personal pensions. For this reason you must check before you apply for a SIPP so you know exactly what it will cost to get your pension up and running.
You should also factor in the ongoing annual charge applied by the various pension providers when making your decision, this tends to be less than for managed pensions but can still represent a significant cost.
You can compare SIPP pension providers using our self investment plans comparison table and should look for the self invest pension plan that gives you access to the markets you want to trade in for the lowest cost.