Hey guys it's sasha today, i'm going to be talking about the free trade sip pension account. I actually made a quick video when they first launched the product several weeks ago, but now that i've been using it for some time, i wanted to go and make a proper review and tell you a little bit more about this product now in the original video That i made, i actually said that this i think, is going to change pensions in a big big way. And i still very much think that i have moved all of my different pension parts and i had quite a few to this free trade sip. And i'm going to tell you exactly why and i'm going to show you what this platform looks like just before we get any further in this.

I am not a financial or a pension advisor. I can't provide any of this financial advice to you and if you do need financial advice, please make sure you go and seek the help of a suitably qualified professional. This is just my personal opinion, based on my personal experience of using the free trade app now. The free trade sip is a type of pension account.

Sip stands for self-invested personal pension and it does pretty much exactly what it says on the tin with almost every normal pension, you have a very limited number of choices. You have a small number of funds, sometimes less than 10 different options to invest in and with others. You might have a few more options, but you still have extremely limited control. You hardly ever actually know exactly what you're investing in many of these funds are not very good at explaining what your money ultimately actually goes and gets invested into.

You have to go and find pieces of paper which are not very easily accessible. Do a lot of research: this is a whole different level of transparent. Now, for decades, people accepted this old methodology of just giving your money over to a pension provider, letting them manage it on your behalf. Most people don't know anything about what their money is invested.

In a few people probably know, maybe the name of the fund, but that's about it. They have often very limited understanding of how much those funds actually earn them. They either don't get the statements or they get an annual statement and they don't even bother reading that. Now many of these pension schemes that people have been using for decades are incredibly expensive.

They charge huge amounts of fees and often they charge you an annual percentage, as well as an annual management fee, which brings me to free trade pricing. I'm gon na come to how it compares in just a second. It is 9.99 a month that is not cheap and certainly for anyone who's just starting out or anyone. Who's young who's only started investing in their pension.

This probably isn't the right product. This probably isn't a very good choice, but if you've already built up a bit of a pot, the fee is actually not bad at all, especially as it doesn't increase as your investments grow. Unlike all the alternatives, traditional pensions typically charge annual management fees, platform fees, fund fees and a whole load of different transaction fees. On top of that, and it can get crazy expensive, there has been a new cap introduced somewhat recently of 0.75 for the majority of these, but not all of them, and some of them charge right up to that cap and it's still pretty expensive, although typically pensions.

Now tend to be charging somewhere like 0.5 on the actual investments in terms of the annual fees, however, there's lots of other penalties and fees and reinvestment fees and uh transaction fees that you have to account for as well. However, with a free trade sip account, if you have a pension pot of something i'd, say: 24 000 pounds, then the annual fee with free trade becomes the same, not 0.5 percent. As your investments grow. Let's say you get to 50 000 you're paying less than 0.25, which suddenly becomes really really cheap.

The real bonus here that you're able to earn way way more aside from the actual lower cost and get a higher rate of return as a result, and this is where the really really cool thing happens now, but just before we get there. This is not the first sip product out there. I am really excited by it, but it's not like they've gone and introduced something that nobody else has done. Lots of other providers have done it, and i know that people will be amazing for me to say this.

Aj bell hargreaves lands that interactive investor ranked loads and loads of other providers do sip accounts. This is not something that nobody else has ever done, but not all sips are created. Equal companies like aj bell, for example, and hargreaves lands down charge the same monthly fee. So it kind of sounds the same, but then there's a huge number of transaction charges that get added on top.

So if you use aj bell's website you could they have a little quick calculator and if i go and make just 12 deposits over the course of a year and invest in only one company or one etf per month, i will still be paying the same 240 Pounds per year for my pension size. Now there are ways of saving if you invest in some of the proprietary funds that they offer on their website. But that kind of puts you back in the same realm, where you have a very limited amount of choice and still, even if you use them for the pension size that i have, for example, which is about 90 000 pounds which i'm going to show you in A second is still going to be more expensive if you want to diversify your investments and want to go and invest in five different companies per month. For example, the cost of this goes up to over 700 pounds a year, which is really quite expensive.

Vanguard can be relatively good value - it's only 0.15 per year for the account fee, which is actually really cheap, but in my case even that is more expensive than the free trade sip and with vanguard, you're limited to only investing in vanguard, proprietary funds in etfs. So here is my free trade super. Can i'm going to stick it up over here? I currently have about 90 000 pounds in it. After moving all the different workplace, pensions that i had over to them other than the 9.99 per month fee, the only other charge you have to pay is 0.45 for an exchange fee for buying us or any other non-pound denominated stocks, which is less than half of What the traditional providers charge, because many of them charge one to one and a half percent on top of all the other fees that i just mentioned.

You won't find that very clearly, but if you dig down it is in there, but that's it with free trade. That's the only thing you're gon na have to pay um i, and on top of that, i have full control over exactly what my pension is invested in which i really really like. If you want to go and try them out, feel free to go and use. My link in the description below, because what you'll get is a free share.

When you set up your general investment account, and once you have that set up, you can then go and create your sip on top as well. All you have to do is go and create the account and make any size deposit in order to qualify by the way. I i have a lot of money sitting with s p 500 in my pension and the bulk of the rest is split between companies that i have really strong views on in terms of the medium and long-term expectations on their growth, and this i just absolutely love The fact that i am the guy who gets to choose where i put my money, but but this is just my portfolio - i am very happy with it. I am happy with where i am invested and i appreciate that for some people it looks horrific.

I am way over invested in tesla. I have a relatively small amount invested in an index and if someone wants to go and do something else, they are free to do so and that's the beauty of this type of sip. You can go and invest. For example, all of your money - if you choose to do so in something like the vusa, which is the vanguard s p 500 etf - and this is the cool thing you can invest in the vanguard - s p, 500, etf, for example.

If you have a pension pod, a bit like mine at a lower cost on free trade, then on vanguard's own platform, the only thing you have to do with vusa is every time you go and have money deposited into your pension. You have to go and actually go and invest actually like buy the shares of vusa and you have to go and reinvest any dividends you earn as well. But if you don't want to bother even with that, if you want a completely passive approach, there is vuwac which is sort of a cousin to boost it does exactly the same thing. It replicates the s, p, 500, but your dividends are automatically reinvested back without you.

Having to do anything, the beauty here is that i can continuously adjust my investments over time as much as i want, as companies or funds begin performing better or worse, and i make a decision that i want to invest in something else. I am free to do so with just a few clicks and it is super easy i can sell out of a company and the worst case scenario is i'm going to have to pay 0.45 on the foreign exchange fee and that's it. I can see my investments super easily manage them, which is already more than what i can do with any of my old pension providers, which is a pretty good start. The beauty of this is that it's possible to set up the sip and move money over from the workplace pension or wherever other type of generic normal pension.

You have over to the sip and keep the other one open so that your employer can continue contributing to that one. You get to benefit from their contributions from the tax benefits of being able to put money in there before it gets taxed, and then you can go and continue siphoning it off into the sip. If you choose to do so, of course, the risks here are much higher doing. Some of this will have a lot more fluctuation and the investments can go up and down a lot more, but compared to traditional pension.

That may be returning something like four to five percent at best um here. If you go and invest in something like a passive index of the largest companies in the us, you would probably expect to get something like 80 on average over the long period through relatively passive and very easy investing, which i think is a huge huge difference and The people just need to be aware of so. If i was much much closer to retirement age, i probably would have a very different strategy. In fact, i probably definitely would have a very different strategy to the one that i currently have in my portfolio but um.

At the moment i have such a long gap that i am prepared to invest in growth. However, as i approach retirement, i may want to go, invest in something super low risk like very robust bonds or very, very stable dividend yields, or something like that. I don't think i am interested in is, but maybe i will in 20 to 30 years time, and the beauty of this sip account is that i am able to do this within the same sip by just reinvesting my money in something else. Whenever i choose to do so now, there's a big perception that, if being invested in traditional pensions with traditional pension managers, experts who know what they're doing is a safe bet.

It is the thing that is so secure and so simple that you know these people really know what they're doing, except those funds go down and lose value just the same as the markets do whenever the markets do, because, ultimately, your money is still invested in the Markets by those people and when the markets do well typically, those funds will be earning considerably less than the markets because of this perceived security that you get from having your money distributed between so many different things, many of which are earning nothing. A lot of pension funds literally carry a proportion of the money sitting in cash earning no interest. Now i am super excited by what this sip might do, because it allows you to go and invest your money with complete freedom, with complete transparency without having to pay the ridiculous percentage-based fees to line the pockets of pension fund managers. Who these days seem to provide.

Almost no real incremental value, if you do want to go and try it out, do make sure you go and use my link in the description below to go and set up a general investment account because the pension account works pretty much exactly the same. It just has a slightly different name up top and if you do use my link and go and make a deposit, you can get a free share worth up to 200 pounds which i really appreciate. But thank you very much for watching. As always, i really really like anyone who gets all the way to the next video.

Thank you so much and i'll see you guys later, you.