Hargreaves Lansdown SIPP Review – The Best SIPP for You?
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In this Hargreaves Lansdown SIPP review, we take a closer look at the product to help you decide whether it is the right investment for you.
There are so many different ways of investing now, it can be difficult to make an informed decision as to which one is best.
An interesting option that is worth taking a look at comes with the Hargreaves Lansdown SIPP*.
What Is a SIPP?
The first point we need to look at is what a SIPP actually is. This stands for Self-Invested Personal Pension. Traditionally, it is a pension plan designed for someone who is comfortable taking charge of their own pension and making investment decisions.
These days, however, there are also SIPP providers who allow you to take a more hands-off approach. We’ll discuss this in the ‘Alternatives’ heading at the end of this review.
This type of investment plan can cover a wide range of investment types.
You don’t need to be a financial expert to invest in this sort of plan but – unless you’re opting for the ready-made option – you do need to be happy making your own investment decisions.
One of the big advantages of this type of investment is that it is also tax-efficient. This simply means that more of your money goes towards your pension rather than on taxes.
The Hargreaves Lansdown SIPP
The fact that pension plans are so variable means that there is a lot to consider before you go ahead and choose one.
Is having your SIPP investment with an established and trusted company important to you? If so you’ll be pleased to hear that Hargreaves Lansdown are actually one of the biggest UK SIPP providers. They are also a FTSE 100 company. Put simply, they’re a huge company and have been around for a long time! Over 440,000 clients have a HL SIPP and HL have over 40 years experience.
Is having a good range of investment choices your top priority? Hargreaves Lansdown don’t disappoint here either. With the Hargreaves Lansdown SIPP there are more than 2,500 funds, investment trusts, shares, bonds and other investment choices to pick from.
A full list of the investment options is available on the HL website. It includes just about every type of sensible investment you might want to make. The question is then which one to choose? You will most likely want to pick a few of them and diversify your investment that way.
This makes it an extremely flexible investment. It can also be tailored to meet just about any type of investment approach. Whether you want a high risk approach, a low risk strategy or something in between. You can choose the right way to save for your future!
How to Get Started
One of the most important aspects of any investment plan is how you can get started on it. You certainly don’t want to waste time trying to get set up or get frustrated because of a difficult process.
Thankfully, with the Hargreaves Lansdown SIPP, it is incredibly easy to get started and managing your investments.
First, you can open an account online*. Don’t worry, the process is a simple one.
You can then control your investment online or you can choose to do it by post or by phone. The most modern way of doing it is to simply download a mobile app. You can then use your phone or tablet to take control of your investments.
This takes a lot of the stress out of investing. It also means you can take care of your SIPP no matter where you are and what kind of lifestyle you lead.
Hargreaves Lansdown SIPP Fees
At this point in our Hargreaves Lansdown SIPP review it would be good to look at the fees.
Hargreaves Lansdown’s SIPP fees are also competitive and simple to understand.
The company’s maximum annual fee for holding your investments is never more than 0.45%. Some funds or other investments may add their own fees, however. This annual fee also decreases as you invest more dropping to 0.25% on investments over £250,000, 0.1% on investments over £1 million and No charge is made on investments over 2 million.
It’s free to set up your account and it’s also free to buy and sell funds.
The annual fee to hold shares is 0.45% but this is capped at £200 per year. The amount you are charged to buy and sell UK and overseas shares depends on how frequent you trade. If you made 0-9 trades in a month then your share dealing fee the following month will be £11.95 per trade. If you made 10-19 trades then this fee drops to £8.95 per trade and if you made 20+ trades, then it drops to £5.95 per trade.
Here’s an example of how the HL SIPP fees might work in practise…
How Much Should You Invest?
To start your Hargreaves Lansdown SIPP you will need to invest either a £100 lump sum or £25 on a monthly basis. This is the minimum amount but should you invest more?
This really depends on what kind of lifestyle you want to have during retirement. If you are unsure as to how much you should invest into a SIPP, it would be worthwhile having a play around with the HL pension calculator*.
HL SIPP Facts and Figures
The numbers provided on the Hargreaves Lansdown website show that they currently have over 440,000 people investing in their SIPP.
Perhaps even more importantly, they were voted Best SIPP Provider by What Investment readers for an impressive 10 years in a row.
Another statistic worth mentioning is that over 97% of their SIPP clients stated that their service is excellent, very good or good, according to a recent survey.
Your Research
While the HL SIPP is designed for someone who is comfortable making their own decisions, this doesn’t mean that you have to be an investment expert right at the start of the process.
In fact, you can do all the research needed on the Hargreaves Lansdown website. Check out their articles and tools and take advantage of their free guide to SIPPs*.
Even if you aren’t a financial expert at the start, you will soon pick up a lot of valuable knowledge as you go. Before long you will become more confident and effective at investing your money.
What if you don’t have a lot of time to dedicate the research matters? In this case you might opt for Hargreaves Lansdown’s readymade SIPP known as Portfolio+. With HL this will require a minimum £1000 investment.
If you don’t have that amount then scroll down to the ‘Alternatives’ heading in this review.
What If You Have an Existing Pension?
One issue that you may have some concerns over is if you have an existing pension plan. Can you transfer your existing pension over to Hargreaves Lansdown? If so, how easy it would be to do so?
The good news is that it is actually incredibly easy to do this. The firm’s site has a very useful guide to moving your pension*. This can be something that is a lot easier to do than you might think.
Most types of pension can be transferred and there is a very simple form to complete in order to do this. After that, it is a process that is normally completed in just 10 days or so.
Hargreaves Lansdown SIPP Alternatives
What if after reading this Hargreaves Lansdown SIPP review you feel that they might not be right for you? Perhaps you feel you want to take a more hands-off approach but you want to start with a small amount. Are there any alternatives to Hargreaves Lansdown?
One sector which is growing in popularity is that of robo-advisors. Robo-advisors invest your money on your behalf based on your own risk profile. They do this for a low fee compared to typical wealth managers. Some robo-advisors also offer SIPP accounts with low initial investment amounts. To learn more check out our Moneyfarm Review.
Summary
As we can see from this Hargreaves Lansdown SIPP review it is a solid and flexible type of pension. It’s quick and easy to open an account online* and it’s possible to transfer your current pension.
With competitive fees and a vast array of investment options to choose from, it could be right for people in many different types of situation and is well worth consideration.
Important information – SIPP investors need to be happy to make their own investment decisions, and understand that all investments can rise and fall in value. It’s possible to get back less than you pay in. You’ll usually need to be at least 55 (rising to 57 from 2028) before you can access the money in your pension. Pension and tax rules can change and any benefits will depend on your circumstances. Before transferring a pension you should always check the costs involved first and whether you’d lose any valuable benefits.