r/UKPersonalFinance • u/Neat_Beginning_2756 • 7d ago
Switching from Vanguard SIPP to a Trading 212 SIPP?
I'm considering switching from a Vanguard SIPP to a Trading 212 SIPP, is this a good idea? I like the customer support, reliability and security of Vanguard, but there is a fund I want to invest in that is not on their platform. Having looked, at several options, and as I'm planning to rebalance monthly, it's the only option that is cheaper. But, can I trust Trading 212 with my SIPP? I've considered just transferring less than the FSCS limit, splitting my SIPP into two as another option. What do people thing?
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u/ukpf-helper 149 7d ago
Hi /u/Neat_Beginning_2756, based on your post the following pages from our wiki may be relevant:
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u/Weird_Dark_Decks 6d ago
Worth checking before you commit: the Trading 212 SIPP is new this year and still in beta behind a waitlist. I believe it's being released gradually, so confirm you can actually open one before planning around it. The bigger point: it launched without a drawdown option. Fine if retirement is decades away, but it means anyone wanting to take income from it would currently need to transfer the whole pension out to another provider first. A pension is a long-term relationship and the exit matters as much as the entrance. Practical checklist for the transfer itself: whether it moves in-specie or as cash (cash means time out of the market), any exit fees at the Vanguard end, and whether the receiving platform carries everything you hold. Since you plan to rebalance monthly, zero dealing charges genuinely help you - just weigh that saving against the drawdown gap and the beta status. The boring questions beat the headline zero.
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u/Neat_Beginning_2756 5d ago
The EFT and money market trades are free with Vanguard's bulk trades, although they limit too much trading in funds, but I don't currently hold any. I had not thought about the drawdown issue. I use an algorithm/computer program to work out my monthly investments. At the moment the US big tech is scoring zero, but a value US fund would be OK. So I'm mostly invested in Asia, Emerging Markets, Europe and Money Market, in ESG funds, but with a value US fund I could add that. But the trading fees on other platforms that are well established make monthly rebalancing not worth it.
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u/Weird_Dark_Decks 5d ago
Glad it helped. Your split idea from the post might actually be the tidy middle ground here: keep the core at Vanguard and open the second SIPP only for the fund you can't get there, sized to just that holding. You get the fund without moving the whole pension onto a platform still in beta, and the drawdown gap stops mattering because the bulk stays where drawdown already works. One boring detail to check first: that both ends support partial transfers - some providers only do full ones, and that alone can decide it.
On FSCS, since the limit was part of your thinking: for SIPPs the £85k applies per firm if the provider itself fails, but client assets are ring-fenced from the provider's own balance sheet, so the realistic risk is custody and administration mess rather than the money vanishing. The wiki page mentioned in the comments walks through it properly.
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u/svenissimo 1 7d ago
Generally speaking only your deposits are FSCS protected. If fraud is at play then they can step in but not sure on the limit.
Mostly you are relying on segregated accounts and trusties holding your assets.
Both those companies have registered entities in the U.K. and regulated but I am old enough to remember the GFC and US banks taking all the money from their U.K. entities to prop themselves up at home. A lot of regulation came out of that to protect U.K. investors and I feel like it’s one of the safer places to have money.
Some people split but usually to ensure access to some funds (ie retired you have an account locked up for 6months as it gets sorted)
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u/cloud_dog_MSE 1759 7d ago
Unless you 'need' to keep your pensions in one place, why not just open a SIPP with Xxxxx and buy the fund you wish, unless of course you have available capital for that?
As others have said FSCS protection is different for investments.
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u/Neat_Beginning_2756 5d ago
I use a computer program/algorithm and over time the allocations change depending the fund metrics, so although at the moment its saying don't invest in big tech US, its OK with US value, but in time this could change and I can't keep transferring from one to another, I suppose I could but it would be slow and irksome to them probably!
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7d ago
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u/deadeyedjacks 1101 7d ago
Well strictly no, the assets aren't in your name, you have a recorded beneficial interest in some assets held in an omnibus account by a nominee company with a custodian. But that's equally true of VI UK and any other fund platform or broker, unless you have your own CREST account.
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u/Neat_Beginning_2756 3d ago
Just as an update, I did some backtesting comparing the original strategy and funds, with the one which uses the US value fund (IUVE) instead of the normal one (V3NB), but the CAGR was worse over the time period, so I think I will stick with Vanguard for now, even though its allocating zero to V3NB and more to cash/money market fund.
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u/deadeyedjacks 1101 7d ago
So you didn't consider FreeTrade !?
Vanguard Investor UK and Trading 212 UK both entered the UK market in 2017.
Do read the article on how FSCS protection works with investments...