Not all SIPPs are truly open
Despite pensions simplification last year aiming to make pension schemes open to everyone and easier to understand, not all Self Invested Personal Pensions (‘SIPPs’) are truly open, according to fund platform Fidelity FundsNetwork.
It reveals that some SIPPs still require a minimum investment into insured funds. Of the 72 SIPP providers listed on Defaqto, FundsNetwork found that at least 1 in 8 (14%) have a contract which requires a minimum investment into the company insurance scheme.
Providers such as Axa, L&G, Friends Provident or Zurich expect a minimum proportion of a SIPP investment to go into insured funds. This can range from £1,000 for some providers to £75,000 for others.
David Dalton-Brown, Head of Fidelity FundsNetwork stated: “In our post A-Day landscape of flexibility and open-architecture, it is surprising to see that so may providers still continue to put minimum fund requirements in place. Investors should be free to choose where they invest their SIPP and take advantage of the benefits that a truly open SIPP can offer.”