In recent weeks we have seen an increase in the number of advisers using our full Minerva SIPP as a way of solving their client’s income needs in retirement.
What types of investments can be held in a Minerva SIPP?
Although many advisers recommend our Minerva SIPP for investments in commercial property and land, it can also be a very efficient and low-cost way of accessing multiple investments under one plan.
Our permitted investments list currently consists of the following types of investments:
*The investments above which are marked with an asterisk would need to be purchased or acquired using a stockbroker who is based in the UK and authorised and regulated by the Financial Conduct Authority. Note that for any of these investments which are listed overseas, we will only allow investments on major markets, subject to our individual approval.
Here are examples of assets that cannot be held in our SIPP products:
The SIPP assets could include a portfolio managed by a DFM (including MPS services), trustee investment plans from insurers including smoothed return funds, fixed term annuities, general investment accounts, share dealing accounts, structured products, gold bullion and cash deposits (including fixed term deposits, notice accounts and certain National Savings & Investments products).
With cash type investments there may be value in seeking higher interest rates, whilst spreading risk and maximising any protection available under FSCS limits (if applicable).
What does it cost?
Minerva SIPP can hold multiple investments for a total yearly fee of only £400 +VAT.
For our typical SIPP value £300,000 the annual SIPP fee (assuming no income or property investment) is £400 +VAT which is equivalent to only 0.16% of the value of the plan (after allowing for VAT). As the fees are fixed, they can be even better value for higher asset values (so £600,000 equates to 0.08%). We don’t levy any set up fees or transaction costs, although naturally there will usually be costs associated with the underlying investments.
Additional fees apply for taking benefits (£100 +VAT for any plan year in which withdrawals are made) or for investing in property and land (£350 +VAT per property). The full Minerva SIPP Schedule of Fees can be found on our website.
How do I arrange an income from my SIPP?
Income payments are made from the SIPP bank account. We currently have two payroll dates per calendar month (15th or 28th) and funds need to be in the SIPP bank account at least 4 working days before the payroll date. We can make payments of PCLS at any time during the month.
Some advisers recommend holding a high enough cash balance to pay income for a specific period, which is then reviewed and topped up from time to time. Other advisers may choose to hold a very small amount of cash and to have a regular withdrawal from the investment(s) to the SIPP bank account.
Note that we do not specify a minimum amount which must be maintained in the SIPP bank account, but responsibility for monitoring this and ensuring that sufficient cash is available is the responsibility of the customer or their adviser.
If you would like to discuss how our products can help your client, please get in touch with our Sales Team on 01228 538 988 or [email protected].
April 21st, 2023