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AD. According to recent figures from the Office for National Statistics, Britons are saving less than at any time during the last 50 years.
This is quite an assertion, but one which reflects the impact real wage growth stagnation and rising inflation have had on the economy. It is estimated that just 1.7% of household income was left unspent during the first quarter of 2017. This figure is likely to shrink as Brexit negotiations continue.
It is therefore crucial that you identify the impact that DIY SIPPs can have on your financial future, while determining which accounts are right for you. Here are some considerations to help you on your way:
- Your Outlook as an Investor
One of the main benefits of a SIPP is that it enables you access to the financial markets, and a host of potentially lucrative stocks and asset classes. How you invest these is an important consideration, however, as you must determine what type of investor you are and whether or not you want to take an active interest in selecting options.
It is crucial that you select the right account for you, and fortunately there are various service providers that allow you different degrees of direct involvement when it comes to managing your fund. This will ensure that you are comfortable while also filling any gaps in knowledge that you may have.
- The Cost of Accounts
The cost of individual accounts is also important, as this has a direct impact on the bottom line on ROI that you are able to achieve through your investments.
The size of your pension pot will usually be a key factor in determining administration costs, with larger funds triggering lower fees. There are some providers that charge a fixed fee regardless of the value of your pension, however, so this may be alluring for those with larger funds.
On a final note, you should remember that providers like Bestinvest combine lower fees with no set-up charges, helping you to optimise the value of your investment throughout.
This brings us neatly onto value, which combines costs and numerous other elements to determine which account is best for you.
These include service and user-friendliness, with the latter being particularly important if you intend to manage your wealth and funds directly. The range of assets that you are able to access is also important, as greater diversity can help to deliver returns over a more sustained period of time regardless of the economic climate.
There are other considerations, of course, but these are three of the most important as you look to optimise your pension funds and find the best DIY SIPP.