Best International SIPP Providers 2022
Who are the best International SIPP providers 2021? The International SIPP marketplace has become ever more crowded in recent times. With varying costs, services, and requirements for becoming a member. This article will summarise the current International SIPP’s (ISIPP) on offer, including all costs and areas to be aware of.
What Is an International SIPP?
An International SIPP is a UK SIPP that has been specifically created for non-UK residents. It allows you to transfer your pension or consolidate existing pension schemes whilst implementing an investment strategy via a locally regulated adviser. It offers full flexible access drawdown from age 55 and the ability to invest and withdraw in all majors currencies. You have extensive investment choice and can hold an array of investments options from individual stocks, passive index-tracking funds, mutual funds to Government bonds. The International SIPP is tax-efficient in that no tax is due unless monies are withdrawn from the pension fund. At which point income tax is applicable in the country you reside in. The SIPP is regulated by the Financial Conduct Authority and is protected via the Financial Services Compensation Scheme.
How does SIPP Structure affect my choice?
How your SIPP is structured with the different layers will have the greatest impact on your pension growth as opposed to the actual SIPP trustee itself. This is best explained by splitting the structure into 3 components.
Component 1 (SIPP Trustee)
This is the international SIPP itself which consists of the pension trustee and administrator. Trustees are responsible for ensuring that the pension scheme is run properly and that members’ benefits are secure.
Component 2 (Investment Structure)
The investment product utilised to invest your monies. This is where your pension capital would be allocated and you can purchase the underlying investments.
There are 2 main options within a International SIPP (ISIPP):
- Low-cost Investment Platform – In this scenario no monies/commissions are paid out of your pension pot.
- Investment Bond/Offshore Bond – This is often a red flag if recommended by your adviser. Often offshore bonds are setup on a commission basis which significantly increases your pensions overall costs (in order to cover the commission being paid out to the adviser). It’s important if you have been recommend an offshore bond to fully understand which charging structure is going to be used for your solution.
Component 3 (Investments Held)
Investment funds – ensure these are regulated assets and ‘clean’ i.e do not pay any initial or trail commissions to the adviser.
Key criteria when selecting the best International SIPP?
- Cost – a full breakdown can be found in the chart below.
- Reputation – What is the history of the company? Have they had issues with misselling in the past? Do they hike their prices every year?
- Servicing – How is their customer service? Are they efficient when actioning requests such as withdrawals?
International SIPP Comparison 2022
Fees vary from one product provider to another. However, the key factor in overall cost is related to components 2 and 3 when setting up the International SIPP.
When considering cost, reputation, and servicing the Novia Global International SIPP tops the chart. It is considerably lower cost than its counterparts, has an FCA regulated platform, and offers an extensive range of investments. Importantly, however, it is very much a basic, no-frills SIPP and as such, may not always be the most suitable solution for your needs.
Can I make further contributions?
Not with the Novia Global International SIPP however other providers do allow you to contribute further. Importantly you will only be able to receive tax relief for the first 5 years you are outside of the UK. This is capped at £3600 (GBP) per annum.
Can I transfer in non-UK pensions? Including pensions which I had transferred into a QROPS previously?
Yes, you can depending on whether it is on the HMRC recognised list.
Can I withdraw the full amount?
Yes, as long as you are over 55 you have complete flexible access to your pension pot. Importantly, if you do not have any NT code then any monies will be taxed at source once you withdraw annual income tax alllowance (currently £12,570). You need to be fully aware of the tax consequences of fully encashing a pension.
The information contained herein is for informational purposes only which is subject to change and should not be relied upon. You should seek advice from a professional adviser before embarking on any financial planning activity.