SIPP FSCS Protection

[DimPrawn]

I have quite a large pension pot in an old stakeholder pension. Stakeholder pensions are 100% covered in the event the pension company goes tits up.

https://www.fscs.org.uk/what-we-cove...ement-savings/

Pension Life Savings: If you are still building up your pension pot, 100% of your pot will be protected if it's directly managed under a life insurance contract. This would include personal pensions and stakeholder pensions, but not defined-benefit workplace pension schemes, which may be instead covered by the Pension Protection Fund.

I was in the process of transferring it to my SIPP, but looking into it, the FSCS protection for a SIPP is bugger all!

https://www.fscs.org.uk/what-we-cove...ngs/#question2

FSCS may be able to consider a claim about SIPPs advice under the FSCS’ investment limit which is £50,000, per person, per failed firm.

Once a SIPP has been set up, a consumer may decide to hold a variety of products including investments, deposits or insurance within the SIPP. These may be held directly with the SIPP providers or with separate providers such as a fund manager, deposit taker (bank or building society), or insurance company.

If a claim arises due to the failure of one of the underlying products held within the SIPP, FSCS may be able to help as long as the underlying product provider is authorised by the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA). The limits of protection depend on the type of product held.

What a pile o tulipe a SIPP is.

[mudskipper]

Well I never knew that.

[DimPrawn]

Hence why 99% of your money is better placed into property.

If you buy a 17 bedroom country pile set in 5 acres, and the world goes tits up, you still have a 17 bedroom country pile set in 5 acres.

A pension pot on the other hand, will be worth £50K tops when the big crash finally arrives....

[barrydidit]

What's the betting if it went tits up then Hector would ask for his CT relief back

[jamesbrown]

But if the money is invested, so what? You will remain the beneficial owner of any investments if the asset manager goes tits up. If it's a cash balance, it's probably held in a bank covered by FSCS, but only up to the FSCS limit. If you're invested in a company and that company itself goes tits up then, sure, you lose that money, as with any investment.

Not really sure what you're saying...?

[DimPrawn]

But if the money is invested, so what? You will remain the beneficial owner of any investments if the asset manager goes tits up. If it's a cash balance, it's probably held in a bank covered by FSCS, but only up to the FSCS limit. If you're invested in a company and that company itself goes tits up then, sure, you lose that money, as with any investment.

Not really sure what you're saying...?

Are you the beneficial owner of the investments or are they pooled? I don't expect the SIPP provider holds the investments directly in your name, but one nominee account on the share register. The FSCS says that claiming compensation for the investments held will be on a case by case basis. Sounds complex and somewhat worrying vs the 100% limitless cover for a stakeholder pension.

[jamesbrown]

Are you the beneficial owner of the investments or are they pooled? I don't expect the SIPP provider holds the investments directly in your name, but one nominee account on the share register. The FSCS says that claiming compensation for the investments held will be on a case by case basis. Sounds complex and somewhat worrying vs the 100% limitless cover for a stakeholder pension.

This is regulated by the FCA (CASS). In other words, yes, there is a none trading trustee company, but you retain the beneficial ownership of all investments. Thus, it's ringfenced in law. There may be some specific FUBAR scenarios though... of course, if all the money is in cash, and we're talking about a sas-sized pension pot then, yes, your millions could be at risk.

[DimPrawn]

This is regulated by the FCA (CASS). In other words, yes, there is a none trading trustee company, but you retain the beneficial ownership of all investments. Thus, it's ringfenced in law. There may be some specific FUBAR scenarios though... of course, if all the money is in cash, and we're talking about a sas-sized pension pot then, yes, your millions could be at risk.

I've asked my SIPP provider what will happen when Komrade Korbyn get in, and turns the UK into another Venezuela, minus the weather and the women...

[jamesbrown]

I've asked my SIPP provider what will happen when Komrade Korbyn get in, and turns the UK into another Venezuela, minus the weather and the women...

In that case, all sensible employees at your preferred SIPP provider will transfer your investment funds into their personal bank accounts and retire to North Korea for its more liberal regime, thereby fecking you over goodly.

[Hobosapien]

As a self investor you need to be registered with the FSCS to get compo if you fail, unless you're too big to fail and get a government bail out.

Those too small to be bailed out will be bailing in. e.g. cash in a bank is just a creditors entry on the company accounts, a list of people that won't get their money back.

You have just discovered the reason why SIPPs were brought about, to protect the banks and investment companies that run the government, so they can offload the responsibility to individuals. Should have read the small print. Some of it written in invisible ink.