Pension (SIPP) Brokers

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Currently my main pension is with an old employer’s scheme which doesn’t support drawdown or UFPLS, so I need to move it to a SIPP to access it.

Main source of info is Monevator’s Broker Comparison. “Experiences” refers to user comments on Monevator or Lemon Fool.

Obviously these are my personal notes and not financial advice. Some information is from 2024 so may be out-of-date.

Requirements

  • Flexibility to choose between drawdown and UFPLS, ideally without additional charges.
  • Need to make several trades a year: initially to invest the transferred cash, then to convert back to cash to withdraw, and possibly to rebalance (although maybe I can do that by choosing which funds to cash in).
  • Interest paid on cash isn’t important. Each year I’ll sell, transfer out, and add to a flexible ISA. SIPP interest rates aren’t competitive with the best ISA rates (or even the best savings rates after 20% tax).

Non-Broker Pension Providers

Quick sanity check against some companies that specialise in pensions rather than being general brokers.

  • PensionBee: no withdrawal fees, charges £1.5K on £500K for tracker investment.
  • Nutmeg: no withdrawal fees, charges £2.5K on £500K for tracker investment (including £1K trading costs).

You’re paying a company to manage the pension, and it’s not cheap.

Cheap Brokers

Free drawdown/UFPLS, cost assumes holding ETFs, shares, ITs (i.e. not funds).

  • AJBell: charges £120 fee cap, £5 trade. Some positive experiences, including transfers.
  • Fidelity: charges £90 fee cap, £7.50 trade
  • HL: £150 fee cap, £7 trade
  • II: charges £180 fixed fee (including funds) or £72 if less than £100k, £4 trade

Currently Fidelity looks like the cheapest unless I make more than 12 trades/year, but AJ Bell have positive feedback. A downside of AJ Bell is that crystallisation is pro-rata.

Expensive Brokers

  • Aviva: charges £120 fee cap No longer capped, £7.50 trade. Some negative experiences.
  • Charles Stanley: £600 fee cap + £60 per drawdown (or more? seems complicated)
  • HBOS: £198 fee cap, £9.50 trade.
  • Lloyds: £198 fee cap, £9.50 trade (£1.50 for funds)
  • Scottish Widows (neé iWeb): £198 fee cap, £5 trade.
  • Vanguard: £375 fee cap. Several reports of very slow transfers.

Unsuitable

  • Dodl: no drawdown (Jan 2025)
  • Freetrade: ETFs only, no drawdown, UFPLS expensive
  • InvestEngine: free (was £200/year until Dec 2024) – ETFs only, drawdown by paper form
  • Plum: expensive, uncapped, no drawdown
  • Prosper: free, no drawdown

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