There are various types of fees charged by SIPP providers:
Trading fee
This is a flat fee charged by the SIPP provider when individuals buy or sell investments. Some SIPP providers do not charge for trading shares, while others charge a fee of £5 to £10 per share trade. Many SIPP providers do not charge for buying or selling funds.
Platform fee
This is an annual fee charged for holding the shares and funds in the SIPP. Some providers charge no fee for this, others charge a flat fee and some charge a percentage, typically 0.25% to 0.45%, of the value of a portfolio.
It’s also worth looking at the types of investments that incur a platform fee as some providers charge for holding funds, but not for shares. Where a platform fee is charged for holding shares, this is sometimes capped at a maximum amount, generally around £100-200 per year.
There are two types of percentage-based platform fees:
• Tiered fee: this is the most usual type of platform fee, whereby individuals pay different fees on different ‘slices’ of a portfolio. For example, for a portfolio worth £400,000, individuals might pay 0.45% on the first £250,000, then 0.25% on the next £150,000.
• Non-tiered fee: only one of the providers (Fidelity) charges a non-tiered fee, whereby the same fee is paid across the whole portfolio. For example, with a portfolio of £400,000, 0.2% is applied to the whole £400,000.
Investment fee
This is charged by the manager of the underlying investment for funds, investment trusts and exchange-traded funds.
Actively-managed funds typically charge an annual management fee of 0.5% to 1.0%, compared to 0.1% to 0.3% for passively-managed (tracker-type) funds.
Drawdown fees
Most of the providers on our list do not charge fees for adding funds to drawdown, taking a tax-free lump-sum, taking lump-sums under UFPLS or buying an annuity.
However, some providers may charge upwards of £50 to £100 for these options.
Other fees
Some of the providers charge other fees, including fees for transferring SIPPs between providers and fees for trading by telephone.
For individuals who buy or sell shares denominated in a currency other than pounds sterling, nearly all of the providers charge a foreign exchange fee. This is also referred to as a foreign currency conversion fee and typically varies from 0.5% to 1.5%. Some providers also charge a higher trading fee for overseas shares.
