Money Talks

Money Talks
Fiji by Julian Cohen. Why?

Money talks?  Well it can, if you talk first

Shortly after posting an article entitled Lend And Borrow: The Perfect Match, I received the message below from Stephen, one of our SIPPclub members.

Simply by talking to his contacts, Stephen has secured a high rate of interest for his SIPP.

What's more, he's helped a friend get the money they needed too.

Read the message below to see how this has been a win-win for Stephen and his friend.

Last week, I met my accountant to seek his opinion about the tax consequences of annuities and income drawdown, among other things.  Having decided income drawdown was better for me, we talked about investments.  I pointed him to SIPPclub on his computer and showed him your article on lending and borrowing.  To my surprise, he instantly asked me if I would be willing to lend money from my SIPP to one of his other clients. 

His client is an established building materials supplier.  He has been given the chance to acquire a piece of land and build a commercial property on it.  The bank was willing to lend, but the terms were so restrictive, the supplier was looking at alternatives such as crowdfunding.

I said I would be willing to lend, because the accountant was willing to vouch for the integrity of the supplier. I told him I would only want to lend for two years or less.  The bank had already confirmed a commercial mortgage would be available once the project was built, so the accountant reassured me I would have no concerns about getting my loan repaid.

To cut a long story short, after a few days negotiating, we agreed a yearly interest rate of 11%.  The supplier was willing to offer a first charge on the land and property.  My accountant spoke to my SIPP operator and my financial adviser, both of whom were very happy with the arrangement, and it is being put in place now. 

I am very pleased with this.  The interest rate is much higher than the best annuity I had been quoted, which made it a no-brainer to go for income drawdown.

I have known my accountant for years and I trust him implicitly.  So when he was willing to help sort this out with another client of his, who he has also known for years, it was the obvious solution. 

Thank you so much for suggesting I talk to my contacts.  I really did not believe it was that easy to earn such a good rate on my pension.  I also feel good that I am helping someone achieve their plans with better terms than their bank could offer. 

Stephen Fahey

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AJ Bell Is Often The Best Value SIPP For Stockmarket Assets

That's our opinion.  Not just because AJ Bell was the first company to offer an online SIPP.  Nor that it's received many prestigious awards.  And not even because the wife of SIPPclub's Founder has an AJ Bell SIPP.  It's because it's one of the most competitive stockmarket SIPPs on the market. 

Over time, charges can wipe out a huge part of your fund.  We like AJ Bell because there are no set-up costs.  If you hold passive funds, which is our preference, or shares, investment trusts, EFTs, gilts or bonds, you pay one small fixed fee no matter how large your fund.  And when you come to draw your benefits either as occasional drawdown or UFPLS payments, there's a small charge for the whole year no matter how many times you access your money (many SIPP and SSAS providers charge more than this for each payment).  However, you should always compare charges in detail, because AJ Bell could be more expensive than other providers, depending on the type of stockmarket assets you hold.

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