Any thoughts that innovation in the SIPP (Self-Invested Personal Pension) market is dead, have been put to rest by the launch of a new socially responsible, fee ‘free’, SIPP.
The new ‘Socially Responsible’ Pension is the result of a partnership between SIPP provider, London & Colonial and fund manager, TAM Asset Management.
How does it work?
TAM Asset Management will meet the annual cost of the London & Colonial SIPP up until benefits, whether that is tax-free cash or income, is taken.
To put it another way, up until retirement no SIPP costs will be payable directly by the member to London & Colonial.
After retirement, assuming Income Drawdown is the chosen option, an annual charge currently of £146 will be made.
In return for providing the ‘free’ SIPP TAM Asset Management will manage the investments held within the SIPP on behalf of the member, who will have access to a wide range of socially responsible investments. There will be charges associated with the TAM Asset Management investments.
What is ‘socially responsible’ investment?
A precise definition isn’t easy to pin down, however it broadly means the investor will take into account both the environmental and social impact of the investments they make.
Responsible investment approaches can be differentiated from conventional investing in two ways. The first of these concerns the timeframes involved, with the ultimate goal being the creation of sustainable longer term investment returns of the kind more commonly sought by pension savers, as opposed to purely short term gains.
The second, is that any form of responsible investment will always require far greater
attention to be paid to the much wider contextual factors. These include the stability
and health of economic and environmental systems, as well as the evolving values and expectations of the societies of which they are a part.
When considering an investment TAM take into account three key factors:
1. Environmental impact
2. Social responsibility
3. Animal welfare
‘You Give – We Give’ scheme
Members of the SIPP will also have change to participate in TAM Asset Management’s ‘You Give – We Give’ scheme.
Any members participating in the scheme, can elect to give a percentage of any income taken to a charity of their choice, with the amount being matched by TAM Asset Management. The amount received by the charity can further be increased through the use of Gift Aid.
Members will also be able to leave a lump sum to charity on their death, totally free of tax.
Commenting on the launch, Adam Wrench, Head of Product and Business Development at London & Colonial, said: “The more socially responsible approach to investing recently introduced through our association with TAM, has now been enhanced even further by the fact that all client charges associated with our SIPP will be met in full by TAM Asset Management. Only at the point where your client starts to take an income from their SIPP will London & Colonial’s fees apply”.
Whilst Lester Petch, CEO of TAM Asset Management, added: “By removing the responsibility for meeting the fees usually associated with investment into a SIPP, not only can your clients now rest assured that their desire to be more socially responsible in their approach to investing is adequately catered for, but such choices will start to make financial as well as ethical sense, in addition to rewarding your more principled clients for their laudable values”.
Want to know more?
If you would like to know more about the ‘Socially Responsible’ Pension you can call London & Colonial’s Paul Forman on 07557 110284 or email pforman@londoncolonial.com
Alternatively call one of the Investment Sense SIPP specialists on 0115 933 8433 or email info@investmentsense.co.uk
