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.

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.
  • Aviva: charges £120 fee cap, £7.50 trade. Some negative experiences.
  • Fidelity: charges £90 fee cap, £7.50 trade
  • II: charges £156 fixed fee (including funds), £4 trade (or SIPP+Investor £264 fixed fee i.e. £204 more than my current Essentials plan, so II actively penalises me for holding both with them!)*

* II confirmed by PM that they allow you to open a separate Pension Builder account (with separate email address) if you already have an Essentials plan to avoid the loyalty penalty.

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

  • Charles Stanley: £600 fee cap + £60 per drawdown (or more? seems complicated)
  • HBOS: £198 fee + £180pa drawdown (or £90 per UFPLS).
  • HL: £200 fee cap, £12 trade
  • Lloyds: £198 fee cap, £11 trade (£1.50 for EFTs)
  • 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, no drawdown, no transfers in except from Vanguard
  • iWeb: not accepting new SIPP accounts (Jan 2025)
  • Plum: expensive, uncapped, no drawdown
  • Prosper: free, no drawdown

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