Type: Full self-invested personal pension
Minimum investment: Lump sum 1,000, 150 a month
Investment choice: SIM range of Skandia investment funds, Self Select UK quoted shares, gilts and debentures, Aim stocks, unit trusts, investment trusts, Oeics, insurance company funds, commercial property, land and all other Inland Revenue permitted investments
Charges: Establishment charge 150, annual charge 160 if Sipp invests only in Skandia funds, 360 if Sipp invests in external funds, transfers in 60 a transfer up to maximum of 300, vesting benefits and transfers out 75, income drawdown 150 a year, telegraphic transfer 25, additional costs for commercial property
Commission: Initial up to 3%, renewal up to 1%
Tel: 023 8072 9761
The Skandia Sipp is a full Sipp providing access to a range of Skandia funds, externally managed funds and other Inland Revenue permitted investments including commercial property.
Origen technical manager Bob Perkins says: “It is a generally accepted fact that the wider investment options available from April 6, 2006, proposed under the pension simplification regime, are likely to result in an increased interest in Sipps as a means of saving for retirement.” He believes the bulk of the interest is likely to result from the ability to hold residential property within a Sipp.
Examining the Skandia product in detail, Perkins says: “This product provides all the flexibility you would expect from a Sipp provider positioning itself for the new opportunities. There are three options for investment discretionary management can be provided through multi-manager, advisers can provide advisory management through self-select and full investment flexibility can be obtained through a full Sipp if required.”
Casting an eye over the product literature, Perkins finds it easy to read and well presented. He says: “The charging structure is explained simply in comparison to some other plans in the market and is competitive. However, advisers would be well advised to provide as much information about property purchases to Skandia at an early stage to determine what charges will apply. Higher than standard charges may apply for multi-tenanted properties, complex arrangements or where significant development or refurbishment is likely to take place.”
Perkins points out that Skandia is not the pension provider, nor the administrators or trustee. He says: “These roles are undertaken by third parties the Bank of Scotland and Sippdeal Trustees. Skandia is unique in that it is the first life company to have an arrangement with Sippdeal and I would expect the relationship to develop further.”
When asked what he dislikes about the Sipp, Perkins says: “There is not much to dislike. Skandia has a good name in the IFA market for design and innovation, but the proof of the pudding will be in the speed and accuracy of the administration, upon which the success or failure of most Sipps stands or falls.”
Perkins thinks competition will come from Standard Life, GE Pensions, James Hay and other established Sipp providers. He concludes: “Overall, I like the Skandia plan it should do well. I expect more players to come to the market with re-launched products, and competitive positions may change as those who are in early need to review their position. However, I would expect Skandia to remain in the forefront both in terms of development and competitive edge.”
Suitability to market: Good
Adviser remuneration: Average