Gumtree co-founder Simon Crookall has launched a self-invested personal pension (SIPP) tailored to exchange-traded funds (ETFs) with a commission-free DIY option through his investment platform InvestEngine.
The InvestEngine SIPP provides flexibility at a low cost of 0.15 per cent, limited at £200 annually, with a commission-free DIY portfolio or a managed alternative at 0.25 per cent pa.
Investors benefit from tax reductions ranging from 20 per cent to 45 per cent and may view their portfolio via the app or web dashboard.
InvestEngine believes SIPPs are a useful tool in increasing individual engagement in retirement planning, supported by its mobile app for easy pension tracking.
According to InvestEngine’s data, there are significant disparities in pension engagement: 81 per cent of people with both workplace pensions and SIPPs actively check their accounts, compared to 35 per cent of people with solely workplace pensions who are disengaged. Additionally, 32 per cent of individuals aged 18 to 34 do not know what pensions are as investments.
“Building a nation of investors,” a study by InvestEngine, reveals low workplace pension member involvement, which is particularly noticeable among younger generations. For example, only 27 per cent of UK people prioritise retirement savings, and 47 per cent of those between 18 and 54 believe long-term financial planning is too far off.
Meanwhile, Employees with SIPPs exhibit higher engagement levels than those with occupational pensions alone. Of these, 32 per cent often check their pension, while 53 per cent do not keep track of their payments.
Additionally, less than half of independent contractors make pension contributions, which raises concerns in light of the growing trend of self-employment.
InvestEngine head of Investments Andrew Prosser says: “There are lots of reasons why people don’t save for their retirement; for many, the pressure on day-to-day finances means they are struggling to prioritise long term investment, while others simply see retirement as something so far in the future that they cannot see the point in investing now.
“But this needs to change, otherwise millions of people in the UK could be heading for difficulties later in life.
“While most people in full-time employment will have a workplace pension as well as the state pension to rely on in later life, for many this will still fall short of providing them with the comfortable retirement they are hoping for. For those who are self-employed, the challenges can be even greater.
“When it comes to growing your pension pot, the best route for many will be via ‘little and often’ investing through diversified and low-cost funds like ETFs.
“That is why we have launched the InvestEngine SIPP – to offer a more low-cost and flexible pension option to help encourage those who are not yet saving for their financial futures to get into the habit of making regular investments so that they can start building up their retirement pots.”
