LV= (Liverpool Victoria) launch new “low cost” SIPP


LV= have launched a new SIPP (Self Invested Personal Pension) aimed at investors with funds which they believe are too small to justify full SIPP charges.

The launch is timely as the FSA start to turn their attention to whether SIPPs are being miss-sold to some investors with smaller funds.

The LV=SIPP will have an annual fee of 0.25% of the plan’s value plus additional costs for each fund used. The SIPP will only allow investors to use a limited range of funds and will not allow access to other popular SIPP investments such as property or ‘sippable’ deposit accounts.

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Ray Chinn LV= head of pensions, said: “With regulatory scrutiny on clients incurring unnecessary SIPP charges we are pleased to be able to offer this simple, clear, low cost option within our wider SIPP wrapper.”

Chinn continued: “We appreciate that some clients want a no-frills, straightforward personal pension, and the wide range of investment funds available means that advisers can easily tailor the plan to suit their client’s risk appetite.”

Restricted fund range

The new LV= SIPP will have a limited range of funds available, 130 in total from 16 fund management groups including Fidelity, M&G and Schroders.

In line with the Retail Distribution Review, due to come into force in 2013, LV= will take no rebates from the fund managers.

Mixed Reaction

The reaction to the launch of the new LV= SIPP was mixed.

A number of SIPP experts questioned whether a plan with a range of funds more limited than many Personal Pensions should be called a SIPP, others suggested that a fixed wrapper cost, instead of the 0.25% LV+ will charge, would be more cost efficient, especially for larger funds.

However, it seems clear that the FSA are focusing on this area, amid concerns that investors are paying for full charged SIPPs when in fact a Personal Pension may be cheaper and provide an equally effective solution.