A London-based investor proved to be one of the most notable clients to take advantage of our end-of-the-financial-year offer to process applications for self-invested personal pensions (SIPPs) right up until the stroke of midnight on 5th April. He rang our fully-manned helpdesk on Saturday morning - the last day of the tax year - to say he wanted to open up a SIPP for £180,000 gross.
The client then sent his application form and cheque for £140,400 net by taxi all the way to our offices in Bristol from London. That's a journey costing £300 plus.
He obviously felt, however, that £300 was a small price to pay since by beating the midnight deadline. £39,600 in basic rate tax was added to his contribution and he is also able to claim back £32,400 in higher rate tax.
Missing that Saturday night deadline would have lost him the right to last year's tax allowances. If funds allow, he is now able to make the same investment and claim the tax allowances again this year.
Had he gone to a traditional SIPP provider it is likely that he would have had to pay up to 5.25% on initial charges on the funds when he invested. That would have totalled £9,450 to which a traditional provider would also have added set-up fees for the SIPP and fixed annual fees, often in the region of £400 each.
We offer a full saving on more than 1,200 funds, so if he invests in one of these funds he will pay no initial charge (only any bid/offer spread), no additional annual SIPP fee and no set up fee - a saving of more than £10,000.
We can't promise to save everybody that much money but we believe that our service as a SIPP provider is probably the most competitive in the UK. For example, I believe we were the only SIPP company accepting SIPP business up until midnight on Saturday, by phone, online or in this case by taxi.
Alex JF Davies
Pensions Director
