Freetrade SIPP Launch
*UPDATE* 12/1/20 Freetrade SIPP is now Live if you put your name down on the waitlist.
As a waitlist member, you can now open the Freetrade SIPP and start saving towards your retirement without growing your fees.
Freetrade have gone and beaten Trading 212 to the punch.
They are going to launch their SIPP first.
We do not have all the details just yet but we do have some!
It will not be free though.
The Freetrade SIPP will cost £9.99 per month or if you are a Freetrade Plus member it will cost you £7. Actually it would cost £16.99 as the Freetrade Plus is £9.99 on its own.
It seems all trades as usual will be free. The money will, as always be made via them charging £3 per month for an ISA. Along with the £9.99 Freetrade Plus account users.
A flat monthly fee beats all the current competition combined with the zero commision trading by a country mile. Until Trading 212 comes along that is.
Another revenue stream is via not paying users interest on cash.
Whilst other more estabilshed platforms charge high fees on account, trading, dividend reinvestment. Basically at every step.
The Freetrade SIPP will charge a flat £9.99 per month.
If you are quick you will bag another free share as well
“Join the waitlist by 6th Dec 2020, open and contribute to your SIPP within 30 days after it’s launched and get a free share worth £40-£2,000. It could be Coca-Cola, Netflix or Amazon!*”
Sign up for a free account and put £1 in to get another free share as well below.
No mention on the site as to when it will actually launch as of yet.
What Is A SIPP?
A SIPP is a Self Invested Personal Pension a handy little acronym.
It does what it says on the tin.
It gives you control over your own pension pot.
With a SIPP you can buy ETFs or individual stocks.
Furthermore, you get all the tax advantages a SIPP offers upfront as opposed to using an ISA.
With a SIPP you get the “tax back” on money invested into it. Think of it like a tax rebate being paid straight in your SIPP. This can help your pot grow quicker than putting in after tax money into an ISA.
However, the downside is that money is locked away until 55 or 57 depending on your current age.
If you have no plans on early retirement and want to build a huge pot this is great. Bear in mind though…
That tax you “got back” when investing? Guess what?
You pay it on the way out at your marginal tax rate. You did not think the government are that kind did you?
This is in stark contrast to the stocks and shares ISA. With an ISA you put in “after tax” money. When you want to withdraw it is then tax free. Not only this you can withdraw at any age without penalty. Any capital appreciation and dividend are also tax free.
Freetrade Plus is a premium service costing £9.99 per month.
Here is what Freetrade Plus brings to the table.
- A bigger stock selection
- Multiple order types – Limit orders, Stop Loss etc.
- ISA account included
- 3% Interest on cash up to £4000
That 3% interest on cash is actually really good, try getting that from a saving account!
It actually translates to £120 a year or £10 per month if you have the maximum £4000 cash in your account.
Essentially your Freetrade Plus is then “free”.
Freetrade charge a flat £3 per month for an ISA.
Trading 212 offer all of the above for free. Multiple order types have been a thing on Trading 212 for over a year as has a free ISA.
Both brokers are always adding more stocks so that’s a non issue. Although the Freetrade plus would likely have more.
Each to their own.
Trading 212 SIPP
Whilst Trading 212 does not currently offer a SIPP you can bet your bottom dollar or pound they are working hard on it now.
A post from April on the forum from Alex
“Yes, we plan to introduce SIPP accounts but we can’t commit to a deadline. Realistically it should be live in 6-12 months from now.
We want to perfect and add depth to our current services before adding new ones.” source.
“Should be launched in early 2021.”
That was in April.
Once Trading 212 launch their SIPP I can tell you now it will be very competitive and likely better the Freetrade offering.
As we get more information on a Trading 212 SIPP I shall be on the ball in letting you know.
It is early days yet but the future is bright.
The days of high platform and trading fee’s are well and truly over.
Personally though as I aim on returning before 57, the earlier the better depending how things pan out of course. I shall be sticking with my Trading 212 ISA
As always thanks for reading,