Two operators, AJ Bell and Standard Life, accept all assets, whereas Old Mutual only allows cash, managed pension funds and units in collective schemes. However, in many cases, this is more than enough to satisfy an investor looking for a simple retirement solution.
On the rise
For evidence highlighting the growth of Sipps in the past five years, particularly the simpler versions offered by platforms, look no further than Money Management’s Sipp survey from October 2013. At the time, AJ Bell had 71,000 plans with a total value of £13.9bn, but this has since grown to more than 204,000 plans and assets have tripled to £44.2bn.
Hargreaves Lansdown has experienced similar growth, expanding from a total value of £10.1bn across 146,000 plans, to £28.2bn over 382,000 plans. This increase has largely been a result of pension freedoms, as annuities have been dodged in favour of more flexible retirement strategies, plus the well-documented increases in DB transfer volumes.
Providers’ business levels at January 1 2019 have been compiled in Table 3. There have been a few changes from last time around. Curtis Banks has launched a new product this year – Your Future Sipp – and, after its acquisition of Suffolk Life, has amalgamated figures across the group into one entry. This explains why the firm is showing a large spike in the number of new plans set up (5,838) when compared with our survey from October, which recorded 2,193 over the previous 12 months. Walker Crips, which previously submitted details for its Ebor Classic and Thoroughbred Sipps, has submitted details for one plan, simply titled the Walker Crips Sipp.
On the new business front, Barnett Waddingham has had a particularly fruitful past year, with more than 4,800 new sales – a sharp increase on the 3,119 recorded in October. The number of closures, however, has almost doubled from 431 to 792.
Overall figures are more difficult to analyse, given that the participants can change for each survey and not all providers submit business activity. But the data that has been recorded shows an uptick from six months ago, very much continuing on the trajectory from previous years.
An unwelcome consequence of Sipps’ growing popularity as a retirement solution has been the escalating number of complaints. Stephen McPhillips, technical sales director at Dentons, says it was little surprise that the Financial Ombudsman Service revealed Sipp complaints between April and December 2018 were 37 per cent higher than in the whole of 2017.
He says: “There is no doubt that the reputation of the whole industry has suffered in recent weeks and months, and Sipps continue to receive mainstream media attention for the wrong reasons. All of this is a sad reflection on a Sipp industry, which, in the majority of operators’ cases, provides a professional and responsible service to meet clients’ complex retirement planning and investment needs.”
