The launch of online SIPPs has attracted a generation of younger investors, according to SIPP provider James Hay.
Research based on James Hay’s SIPP accounts shows online SIPP, or ESIPP, investors have an average age of almost 45, compared to the average traditional SIPP holders at almost 55.
The provider, which launched its ESIPP in January 2004, attributes the product's popularity to its average size, which tends to be smaller than that of the traditional SIPP. The provider says the lower charges associated with online SIPPs have made the products feasible to smaller pension portfolio holders.
Chris Smeaton, propositions and e-commerce manager at James Hay, says: “We would still advise that investors seek professional advice but that even online SIPPs offer unrivalled control over investment strategies for retirement, allowing investors to match risk and performance to their specific retirement goals.”
Smeaton expects the average age of ESIPP clients to fall as more people become aware of the need to save for retirement. He says the ESIPP lends itself to younger professionals and the future high net-worth entrepreneurs.
He also says more people have signed on to web-based financial products.
He says: “It’s almost like online banking was five years ago. The whole concept was crazy to people. They were very worried about security and people stealing money online but people adjust and get used to the internet to do shopping and manage their finances.
“This is just an extension of that. Why not do your pension online also? Without a doubt, you can save money by using the internet to research and manage investments.
“It demystifies pensions and pensions for years have had this cloak of mystery over them. Everyone is quite afraid when they don’t understand something but the internet has allowed us to demystify SIPPs.”
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