Harbour International SIPP Review
The Harbour International SIPP was launched by The Pension Solutions Group as an alternative to the poor service, expensive and opaque charging products that were previously offered on the market. Rather than assess whether it has achieved its objective this review will focus on exactly what it offers and allows the member to do.
International SIPP – Background
An International SIPP or non-resident SIPP allows those who reside outside of the UK to consolidate existing UK pensions. It allows greater control over your investment and the ability to access your monies from age 55 under the UK Pension Freedoms act 2015. Key benefits of which I have covered in a previous blog article available here.
Types of investment within the SIPP
Within the Harbour International SIPP you are able to utilise different structures to invest your pension monies. The 2 different types are:
Offshore Bond – An offshore bond is a tax wrapper set up by an Insurance company and usually domiciled in a favourable jurisdiction regarding the tax regime. Within the bond, you are able to invest in different funds depending on your level of risk and investment objectives. Importantly there is never a good reason to utilise an offshore bond within a pension as a pension is itself a tax wrapper. As such, there is no benefit to using an offshore bond within the Harbour International SIPP. The only reason any adviser would recommend this is because bond providers pay commission for using their products and they also allow commission paying funds to be used within the bond. Typically, a bond provider will pay 10 – 12% over 8 years to the adviser with the funds paying an additional 4%. All this has to be made back via fees from your investment. We would never recommend utilising an offshore bond within a pension.
Offshore Investment Platform – Like an offshore bond, an offshore investment platform allows you to hold multiple forms of investment based on your view to risk and objectives. Unlike the bond, however, the platform is within the UK, meaning it is regulated by the FCA Financial Conduct Authority (offering you the highest level of protection), is low cost, fully transparent and does not pay out a commission to advisers for using it or allow commission paying funds to be utilised. As it is FCA regulated it will also only allow UK standard assets ensuring you cannot be put into unregulated high-risk funds (like in a bond) that risk becoming illiquid.
The Harbour International SIPP costs £399 setup and £399 per annum. This is similar to a number of providers on the market. You can view a full International SIPP price comparison here.
Is the Harbour International SIPP right for me?
The Harbour International SIPP, like many other SIPPs on the market, can offer significant benefits to those residing outside of the UK. The structure within the SIPP, i.e Bond, Platform or property via deeds is fundamental as to whether the product is being utilised properly and in your best interests. Are there any better SIPP available? I address this question in a different article.
What if I want a second opinion on my Harbour International SIPP?
If you have been proposed a Harbour International SIPP, whether with an offshore bond in or otherwise and would like a non-biased, professional opinion on whether this is the best solution for you and what other options are available, contact a regulated, qualified financial adviser. Harrison Brook specialises in pension management for expats throughout the world. We are completely transparent with all costs working on a fee basis and not commission. We utilise UK regulated products (FCA) and hold a 5-star rating from independent review site Feefo.
Get in touch today if you would like to discuss your situation with one of our Financial Advisers.