InvestEngine launches low-cost ETF personal pension as research shows too few are preparing for retirement


  • InvestEngine launches new ETF (exchange-traded fund) SIPP (self-invested personal pension) with a commission-free DIY option.
  • Launch comes as new research from InvestEngine finds that a SIPP can help increase engagement in retirement planning, with individuals who have one more likely to check it, increase contributions or download an app to better manage it.
  • Research also shows a third of adults with just a workplace pension describe themselves as disengaged with their pension, while four out of five with both a workplace and personal pension say they are engaged with their retirement fund.
  • InvestEngine’s simple, diversified and cost-effective SIPP gives people more flexibility in how to invest for retirement and with greater transparency.

Investment platform InvestEngine has launched its self-invested personal pension (SIPP) dedicated to exchange-traded funds (ETFs), offering a low-cost and flexible way for people to invest for retirement.

ETFs are investment funds that track the performance of a specific index or basket of companies, allowing diversified investing in one straightforward security. By investing solely in ETFs, the InvestEngine SIPP offers a simple and low-cost way for people to build up assets over the longer-term.

InvestEngine believes that SIPPs are a good way to encourage greater engagement by individuals in their retirement planning, with its app-based service making it easier for people to check-in on their pension.

Its latest research found that more than a third (35%) of adults with just a workplace pension admit that they don’t engage with their retirement fund. By contrast, four out of five (81%) people with both a workplace pension and a SIPP described themselves as engaged with how their pension was performing. The research also revealed a low level of understanding among younger generations, with a third (32%) of 18-34 year olds either unsure or not believing pensions were a form of investment.

Low engagement is an ongoing problem facing the pensions industry. In its recent report, Building a nation of investors, InvestEngine found that only around a quarter (27%) of UK adults listed saving for their retirement as one of their top financial goals, with almost half (47%) of young and middle-aged adults (18-54 year olds) now saying that long-term financial issues, like preparing for retirement, are too far away to prioritise right now.
Andrew Prosser, Head of Investments at InvestEngine, said“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.”
InvestEngine’s research found that those individuals who have a SIPP are more active in managing their retirement fund than those with only a workplace pension, such as looking at where it is invested (27% vs. 13%), increasing contributions (21% vs. 14%) and downloading an app to better manage their funds (21% vs. 12%).

A third of individuals (32%) with a SIPP say they check their pension several times a year. By contrast, more than half (53%) of those with only a workplace pension admit they have never taken any action to check or manage their retirement fund, leaving them at risk of being charged excessive fees, suffering poor performance and potentially losing track of it over time.

Earlier this year, the Institute for Fiscal Studies found that fewer than one-in-five self-employed workers are paying into a pension, made all the more concerning due to the rise in self-employment in recent years.
Andrew continues: “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.”

The InvestEngine SIPP costs just 0.15% – capped at £200 a year – plus the cost of investments, and investors can choose their own investments via the DIY Portfolio, which is commission-free, or have InvestEngine manage it for them for 0.25% pa.

Investors have full access to their portfolio via the InvestEngine app or web dashboard where they can see exactly which companies, sectors and regions they are invested in. They will also enjoy tax relief on income paid into their InvestEngine SIPP, from a guaranteed 20% and to up to 45% for additional-rate taxpayers.

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