My first reaction on reading about the new Aon Sipp was “Not another Sipp”. However, in reality, this underlines the demand from the growing number of people who now wish to have greater control of both their pre- and post-retirement planning.
Much comment has been made regarding Sipps being expensive. But, with increased competition, I believe this is no longer the case. The Aon Sipp, with an initial fee of £500 and an annual administration charge of £500, while a little more costly than some, is a competitively priced product. There are some fairly nominal additional fees for contributions and transfers which have to be borne in mind. In addition, all fees attract VAT.
Charges for property transactions are on a time-cost basis – as they should be, given the often time-consuming and complex nature of such transactions.
But, while this will no doubt appeal to many of Aon's own clients,
I cannot help but feel that there are a number of other providers, such as James Hay Pension Trustees and PPM, which have had considerably more experience in running Sipps. These firms have highly-efficient and well-proven systems in place that have been tried and tested over a number of years. This is particularly important when clients wish to start drawing down an income, as this introduces yet another level of admin that includes additional reporting requirements to the Inland Revenue.
I cannot see any outstanding features that would particularly want me to recommend an as yet untried product but it is a reasonably competitive plan.
Tom Gibson is a senior consultant at Wentworth Rose