We don’t support this browser anymore.
This means our website may not look and work as you would expect. Read more about browsers and how to update them here.

Important investment notes

General

  • The information on this website is not advice, it is provided solely to enable you to make your own investment decisions. The investments and/or investment services referred to may not be suitable for all investors. Unless we tell you otherwise, we won’t make any assessment of whether the investments and/or investment services you choose are appropriate or suitable for you, so you won’t have the protection of us telling you if they’re not. If you are unsure of the suitability of any investment, you should contact our Financial Advisers for advice.
  • We place investment instructions for you on an execution only basis. This means we don’t give you advice on your investment decisions except where you’ve specifically engaged one of our Financial Advisers to do this. You’re responsible for making your own investment decisions, and for ensuring you are, and continue to be, eligible to hold your chosen investments. You should make yourself aware of any restrictions on holding or trading your chosen investments, whether those restrictions are imposed by law, the issuer or provider of an investment, or otherwise.
  • Unlike cash, stock market based investments are not guaranteed and fall in value as well as rise, we therefore believe you should only invest for the long term (5+ years). Ultimately you could get back less than you invest. Any yields will vary over time so income is variable and not guaranteed.
  • If you invest in individual shares listed on the stock market please be aware shares can be delisted at any time, sometimes with no prior warning. If this occurs it may be difficult and costly, or even impossible, to sell your shares. You could lose the entire value of your investment.
  • Cancellation rights may not be available. The investments featured do not provide capital guarantees like a deposit account and are not always readily accessible.
  • Past performance should not be seen as an indication of future performance.
  • Exchange rate fluctuations may have an adverse effect on the value of non-UK shares.
  • Tax rules referred to are those that currently apply unless otherwise stated, they can change over time and any benefit to you will depend on your circumstances. Within ISAs and SIPPs, all gains are free of capital gains tax and income is free of UK income tax.
  • In addition to any initial charge quoted there may be a bid/offer spread or dilution levy.
  • The FCA does not regulate any prize draw.
  • Some investments (e.g. some AIM stocks) are less readily realisable than others and it may therefore be difficult to deal in or obtain reliable information about their value.
  • Before you decide to transfer an ISA, pension or unit trust please ensure you understand how the transfer will be made. Most groups will allow you to transfer as stock but not all stock can be held in with HL. When transferring as stock you will typically be unable to sell your holdings during the process, for example if you wish to protect yourself from falls or realise gains. If you choose to transfer as cash remember you will be out of the market for a period. This may work in your favour if the market falls but if it rises you will not benefit from any growth while you hold cash. A few groups levy exit fees, please contact us for more details.

Product Specific

  • AIM, Aquis, and penny shares: AIM & Aquis exchanges and penny shares carry a higher degree of risk of losing money than other UK shares. It may be difficult to deal in these shares. There may be a big difference between the buying price and the selling price of these shares. If they have to be sold immediately, you may get back much less than you paid for them. The price may change quickly and it may go down as well as up. It may be difficult to obtain reliable information about their value or the extent of the risks to which they are exposed.
  • Annuity rates: although some annuity providers provide cancellation rights, these are only available for a limited time and once the annuity is set up you cannot normally cancel it or switch to another provider. Annuity rates may change from time to time and are only guaranteed for a limited time period. An annuity does not have a cash-in value. Annuities are covered by the Financial Services Compensation Scheme. This can act as a safety net should an annuity company become unable to meet its annuity obligations.
  • Venture Capital Trusts (VCTs): while some VCTs may be viewed as less risky than others, investors should remember that VCTs as a whole are higher-risk investments.
  • ETFs, ETCs and ETNs: investing in these products may expose you to additional risk, for instance you may be at risk if the product's counterparties fail. It's important you understand the specific risks associated with your investment. Find out more about ETFs, ETCs and ETNs including the risks.
  • Pensions/HL SIPP: if your employer offers a pension you should consider using this first. The pension and tax rules are subject to change by the government. Tax reliefs and state benefits referred to are those currently applying. Their value depends on your individual circumstances. A small personal pension may reduce your entitlement to state benefits.
  • Active Savings: inflation will reduce the spending power of your money over time. When you save in a fixed term product you can’t usually take out your money before the end of the term. Some fixed term savings offer cancellation rights. This means you can change your mind, typically within 14 days of the start of the term, and receive your money back.

Pension contribution checklist

Please read carefully. Particularly important if you have made, or plan to make, large pension contributions.

Most UK residents under 75 can contribute to a personal pension and benefit from tax relief. However there are restrictions of which you need to be aware.

  • Relevant UK earnings: total personal and employee contributions each tax year cannot exceed total earnings from employment and self-employment for that year, or £3,600 if higher.
  • Annual allowance: total pension contributions (including from an employer) are subject to a £60,000 (gross) allowance each tax year. Retirement benefits built up in a defined benefit pension are given a value which also counts towards the annual allowance. You should ask your provider what that value is. Investors with high incomes may have a lower annual allowance. For every £2 of 'Adjusted Income' over £260,000, the annual allowance falls by £1, subject to a minimum allowance of £10,000 (gross). Very broadly, 'Adjusted Income' is total taxable income plus employer pension contributions. Payments cannot be refunded on the sole grounds they are above the annual allowance and may incur a tax charge.
  • Carry forward: you may be able to pay in more than the annual allowance by carrying forward unused annual allowance from previous tax years.
  • Money purchase annual allowance (£10,000 gross): could affect you if you have taken flexible pension benefits after 5 April 2015 or held flexible drawdown before 6 April 2015. The pension provider through which you took these benefits may have told you if this applies. This allowance is calculated in a similar way to the annual allowance but only includes money purchase contributions and you cannot use carry forward. If this limit ever applies to you, you must let us know.
  • Lifetime allowance (currently £1,073,100): this was the total you could accumulate in your pensions without paying a lifetime allowance tax charge, however the lifetime allowance tax charge was removed from 6 April 2023. Currently it provides an upper limit to the maximum tax-free amount an individual can typically take across all their pensions. It is set to be removed altogether from 6 April 2024. It is currently measured when pension benefits are taken and at age 75. It takes into account all private and work pensions, including those from which you already take an income. There is no tax charge should the total of your pensions exceed this figure. Unless you have taken out protection your tax free cash will be limited to 25% of your pensions to the maximum of £268,275.
  • Enhanced or fixed protection: if you have enhanced or fixed protection against the lifetime allowance, that you applied for prior to 15 March 2023 then pension contributions made after 5 April 2023 will not invalidate the protection.
  • Recycling: if you significantly increase pension contributions in the year of taking tax-free cash from a pension or in the two years before or after, this may be deemed as recycling of tax-free cash and subject to a punitive tax charge.

This is a brief summary of the main rules and cannot cover every nuance. We have allowance factsheets available. If you have any questions please call our Pensions Helpdesk. If you are still unsure they can put you in touch with a financial adviser.

Pensions transfer checklist

Read before transferring pensions.

You could enjoy many benefits when you transfer to the HL SIPP, but could also lose valuable features of your old pension(s). Give extra consideration to these factors if approaching retirement as you will have less time to make up for any losses.

The following factors commonly apply:

  • You should check how the annual and other charges of your current provider and the HL SIPP compare.
  • 'Market Value Adjustments/Reductions' or transfer penalties are applied by some providers. These could cause a significant reduction to your pension fund.
  • You could lose valuable guarantees on annuity rates, growth, bonuses, minimum retirement incomes, discretionary bonus rates or a potential demutualisation bonus. Defined Benefit, e.g. final salary, pension schemes generally prevent transfers to money purchase pensions, unless you have received personal advice from a financial adviser who holds the appropriate pension transfer qualifications. This can include money purchase pension schemes with guarantees, such as on annuity rates. Some government pension schemes may not permit any such transfers. It is rarely a good idea to transfer ‘Deferred Annuities’ as they promise to pay a hard-to-beat retirement income. An Additional Voluntary Contribution (AVC) linked to a defined benefit scheme could give a higher pension and/or tax-free cash entitlement if not transferred. We normally insist you take advice to confirm it is in your interests to transfer such pensions.
  • You can choose to either transfer your current pension investments, or have them sold and transfer the cash proceeds. Where possible, your provider will transfer each investment and any cash to HL. Where you are transferring funds, once we receive them from your current provider we will convert them to the lowest cost version available on our platform, please let us know if you don’t want to convert. If you stay invested during the transfer, you could make gains and losses. Usually you cannot trade until your transfer is complete.
  • If you don’t tell us that you’d like to transfer your investments, we’ll assume that you want to transfer as cash. If you choose to transfer as cash, you won’t make investment losses or gains for a period. This may not work in your favour.
  • You could lose benefits such as life insurance or waiver of premium insurance.
  • If you were born after 5 April 1971 and have a pension which allows you to take benefits between 55 and 57, the lower retirement age can be retained on transfer to the HL SIPP. However, depending on the type of transfer, the lower retirement age may only apply to the transfer funds themselves (and any subsequent growth and income derived from those funds) and not to any existing HL SIPP funds or any future contributions or transfers in. Before transferring, you should check with your current provider whether or not you have a protected retirement age.

In some cases you could also lose:

  • Employer contributions or other benefits if transferring a work pension.
  • A tax-free cash rate higher than the usual 25%, if transferring some occupational pensions, or pensions that have received a transfer from them.
  • The ability to take benefits before age 55.
  • Enhanced or fixed protection against the lifetime allowance (this is rare).
  • Gender-specific annuity rates within some occupational pensions, which could benefit males.
  • The inheritance tax-free status of the pension benefits on death, if you die within 2 years of making the transfer.

We do not check what benefits you would lose or penalties you would incur. It is your responsibility to ensure a transfer is right for you. Your transfer will proceed on the basis your current plan is not subject to any existing or proposed trustee in bankruptcy orders, earmarking orders, pension sharing orders or other receiving orders unless you inform us otherwise. There is no guarantee any funds you choose will perform better than those transferred. We will ask your provider to transfer your pension as quickly as possible. If they make a same-day CHAPS payment there may be a charge. If you are at all unsure a transfer is right for you, please contact us for personal advice before proceeding.

This is based on our understanding of current legislation and proposed changes. Correct as at 5 April 2023. The government can and do change the rules.

WIIN0422

Hargreaves Lansdown

One College Square South | Anchor Road | Bristol | BS1 5HL
Authorised and Regulated by the Financial Conduct Authority
www.hl.co.uk