By Jonathan Laws, ACA, Ch.FCSI, Senior Independent Financial Adviser, Cameron James USA.
If you live in the United States and want to move your UK pensions into one place, the choice usually comes down to two providers: the Novia Global SIPP and the Morningstar Wealth International SIPP. Both accept US residents into the SIPP, both are adviser-led and both are backed by one of the two largest custodian groups in the world. Most UK pension providers will not deal with a US resident at all, so either is a long way ahead of staying put.
This page sets out where the two differ for a US resident: US-domiciled funds and the US withholding tax they avoid, what each can hold outside the pension, interest on cash, and the cost of taking income. It is written for UK expats and British expats in the US and for US citizens and green card holders with UK pensions, in equal measure.
Already with one, or choosing between them?
We will compare both on your actual pension values and tell you which fits, including where any ISA or UK funds should sit.
Key Takeaways
- Our verdict: for US residents, the Morningstar International SIPP is the clear winner. Novia Global remains a sound, transparent SIPP, and both accept US persons.
- US-domiciled funds: Morningstar gives access to US-domiciled funds, which take PFIC out of the picture and avoid the US withholding tax that UK and Ireland-domiciled funds suffer on US dividends. Novia Global does not accept US-domiciled funds at all.
- Money outside the pension: Morningstar can hold an ISA or general investment account for a US person on a PFIC-compliant basis, with an annual US tax report. The Novia Global General Investment Account is not available to US persons.
- Cost: Morningstar is cheaper on charges alone at every size we model. On top of that, the US withholding tax its US-domiciled funds avoid and the interest it pays on US dollar cash are worth at least around 0.13% a year in favour of Morningstar, so on a £500k pension the gap is around £650 a year.
- Taking income: Morningstar charges one flat £125 a year. Novia Global charges £150 a year plus £200 per crystallization and £13.50 per payment out.
- Cash: Morningstar pays interest on cash. Novia Global pays none, and requires a minimum 2% cash holding that therefore earns nothing.
- Advice: both are adviser-only. A US resident needs an adviser with SEC authorization, and neither can be self-invested.
Novia Global vs Morningstar at a Glance for US Residents
| For a US resident | Novia Global | Morningstar International |
| SIPP open to US residents? | Yes, through an SEC-authorized adviser | Yes, through an SEC-authorized adviser |
| US-domiciled funds | Not accepted | Available, including in the SIPP. ISA and investment accounts use the US Taxpayer Service |
| US withholding tax on US dividends | Typically 15% lost inside UK and Ireland-domiciled funds | None expected on US-domiciled funds held in the SIPP |
| General investment account for US persons | Not available | Available on the US Taxpayer Service |
| ISA for US persons | No | Existing ISAs can be held on the US Taxpayer Service |
| Annual US tax report | No | Yes, for each ISA or investment account |
| PFIC inside the SIPP | Reporting exception generally applies during accumulation | Reporting exception generally applies during accumulation |
| Interest on cash | None. Minimum 2% cash holding | Paid. Bank of England base rate less 1% on sterling, US Federal Reserve rate less 0.35% on US dollars |
| Cost of taking income | £150 a year, £200 per crystallization, £13.50 per payment | £125 a year, flat |
| Establishment charge | None | £195 |
| Custodian | BNY Mellon Pershing (Channel Islands) | Northern Trust (Channel Islands) |
| Investment platform regulation | UK, Financial Conduct Authority | Jersey, Jersey Financial Services Commission |
| Withdrawal currency | Sterling, with foreign currency crystallization and withdrawals planned | Sterling |
| Self-invest option | No | No |
Table: the two SIPPs compared for a US-resident member at the review date. Provider charges and features are subject to change on notice.
Which Is Better for US Residents?
For US residents, Morningstar, and clearly. There are three reasons, and any one of them can decide it.
- US-domiciled funds. They take PFIC out of the picture, and they avoid the US withholding tax that UK and Ireland-domiciled funds suffer on their US dividends, which on US-source income of just 0.5% a year costs around 0.075% of the pension every year. Novia Global does not accept them.
- Money outside the pension. Most US residents with a UK pension also have an ISA, UK funds or cash. Morningstar can hold those for a US person on a PFIC-compliant basis on the same platform. Novia Global cannot.
- Cost. Morningstar is cheaper on charges alone at every size we model, and the gap widens once you start taking income, because Morningstar charges one flat fee where Novia Global charges per event. It also pays interest on cash, where Novia Global pays none on a cash holding it requires to be at least 2% of the account.
Novia Global has real advantages of its own. Its investment platform is fully regulated in the UK by the Financial Conduct Authority, and it plans shortly to allow benefits to be crystallized and withdrawals paid in foreign currencies, which would let a US resident draw income in dollars. It also has no establishment charge. For a US resident, those are not enough to outweigh US-domiciled funds, a home for money outside the pension, lower charges and interest on cash, but they are worth knowing. Novia Global is a well-run, transparent SIPP that a US resident can use. Where it can still make sense is a smaller existing Novia Global pension with little US equity exposure, where the withholding tax point is worth less and the saving takes longer to cover the £250 cost of moving out. That is a case-by-case decision, and it is one of the first things we model.
PFIC and US-Domiciled Funds: The Difference That Decides It
Almost every UK or Ireland-domiciled fund is a Passive Foreign Investment Company to the Internal Revenue Service. Inside a UK SIPP, a reporting exception applies under the section 1298(f) regulations at 26 CFR 1.1298-1(c)(4) to PFIC interests held through an arrangement treated as a foreign pension fund under an income tax treaty, where the treaty allows the income to be taxed to the member only as it is paid out. PFIC tax is therefore generally not expected on SIPP holdings during accumulation on either platform. Reporting may still apply in some circumstances, which your CPA or Enrolled Agent should confirm on your own facts.
PFIC is therefore less of a deciding factor inside the SIPP than outside it, but US-domiciled funds still matter inside the SIPP, for the withholding tax reason set out below. For anyone who wants to take PFIC out of the picture altogether, US-domiciled funds are the way to do it, and only Morningstar offers them. For money outside the pension the difference is decisive: UK funds in an ISA or investment account are PFICs, taxed punitively and reported each year on Form 8621, and Novia Global has no account a US person can use for that money. Our guides to keeping a UK ISA as a US resident and PFIC restrictions on UK platforms cover the wider problem.
Morningstar solves this through its US Taxpayer Service. It restricts management to SEC-regulated investment managers, gives access to qualifying US-domiciled funds and produces an annual US tax report for each ISA or investment account. It charges the same platform schedule as other Cameron James client accounts, plus £195 a year per account for the US tax report. It is not needed for the SIPP.
US Withholding Tax: Where Morningstar Pulls Further Ahead
US withholding tax applies to US-source dividends and income, but not capital gains. For SIPP members, our working view, having consulted several tax advisers, is that no US withholding tax is expected at the level of the SIPP on either platform, since the position is assessed at scheme level.
The difference is inside the funds. A UK or Ireland-domiciled fund that holds US shares suffers US withholding tax, typically 15 per cent, on the dividends it receives, and neither the SIPP nor the member can reclaim it. On Novia Global that is the only way to hold US equities, because it does not accept US-domiciled funds. A US-domiciled fund held in the Morningstar SIPP receives its US dividends without that deduction, and on our working view no US withholding is expected when it pays them on to the SIPP.
The amounts are not trivial. Even if a portfolio produces just 0.5 per cent a year of US-source income, 15 per cent withholding inside the funds costs 0.075 per cent of the pension every year. It never appears on a charges schedule, and on a £500k pension it is around £375 a year, more than the whole difference in platform charges at that size. This is a professional view, not formal tax advice.
Fees Compared: Novia Global vs Morningstar
Both providers charge in two layers: a SIPP scheme charge for the pension wrapper, and a tiered platform charge on the value of the account. The figures below are from the schedules that apply to Cameron James USA clients. The Novia Global rates are lower than its standard rate card, and are the same rates many advice firms can access. Morningstar figures are shown without VAT, which is not normally charged to members who are not UK resident. Novia Global figures include any VAT payable. Charges are set by the providers, are subject to change on notice, and should be confirmed against the current schedules before any decision.
SIPP scheme charges
| Charge | Novia Global | Morningstar |
| Establishment | None | £195, one-off |
| Annual SIPP charge | £240, at £60 a quarter in advance | £195, in advance |
| Drawdown or income charge | £150 a year while drawdown is active | £125 a year, flat, once any money moves into drawdown |
| Each benefit crystallization | £200 per event | None |
| Each payment out | £13.50 per payment | Bank transfer charges only. BACS free, Faster Payment £10, CHAPS £30 |
| Transfer out | £250 to a UK pension, £1,000 to an overseas pension | No platform exit charge |
| Transfer in of an overseas pension | £250 | Not stated in the schedule |
| Additional work | £100 an hour, exceptional circumstances only | £100 an hour, where applicable |
Table: SIPP scheme charges from the schedules applying to Cameron James clients at the review date. Not a quote.
The difference that matters most is how each provider charges for taking benefits. Morningstar charges one flat £125 a year once any money moves into drawdown, however often you draw and however many times you crystallize. Novia Global charges £150 a year in drawdown, then £200 every time benefits are crystallized and £13.50 for every payment out, so its cost rises with how you take your income.
Platform charges
Both platform charges are tiered on a marginal basis: each rate applies only to the slice of the account within that band. Novia Global does not apply its platform or custody charge to money held in cash.
| Novia Global band | Novia Global rate | Morningstar band | Morningstar rate |
| Up to £300k | 0.30% | Up to £250k | 0.35% |
| £300k to £750k | 0.25% | £250k to £500k | 0.28% |
| £750k to £2.5m | 0.15% | £500k to £1m | 0.21% |
| Over £2.5m | 0.10% | £1m to £2m | 0.14% |
| £2m to £5m | 0.07% | ||
| Over £5m | 0.03% |
Table: tiered platform charges. Morningstar also publishes equivalent US dollar and euro bands for accounts held in those currencies.
Dealing and other charges
| Charge | Novia Global | Morningstar |
| Custody | 0.04% a year, excluding cash, on top of the platform charge | Included in the platform custody and administration charge |
| Fund dealing | £4 per trade for UK, Luxembourg or Ireland-domiciled funds, £7.50 for Channel Islands, £2.50 per rebalance trade | Maximum £4 per trade |
| Exchange traded fund dealing | £1.50 per trade, plus 0.05% stockbroker commission and a £9.50 settlement fee | Maximum £4 per trade |
| Interest on cash | None paid. Minimum 2% cash holding | Paid. Bank of England base rate less 1% on sterling, US Federal Reserve rate less 0.35% on US dollars |
Table: dealing and other charges. Interest on cash is netted off in the net cost table below.
What that looks like in practice
The tables below show the annual platform, custody and SIPP charges for a fully invested account, before fund charges, dealing costs and advice fees.
| Pension value | Novia Global | Morningstar | Difference |
| £300k | £1,260 | £1,210 | Morningstar £50 lower |
| £500k | £1,840 | £1,770 | Morningstar £70 lower |
| £1m | £3,040 | £2,820 | Morningstar £220 lower |
| £2m | £4,940 | £4,220 | Morningstar £720 lower |
Table: annual charges while building the pension. Excludes the one-off Morningstar establishment charge of £195. Not a quote.
| Pension value | Novia Global | Morningstar | Difference |
| £300k | £1,410 | £1,335 | Morningstar £75 lower |
| £500k | £1,990 | £1,895 | Morningstar £95 lower |
| £1m | £3,190 | £2,945 | Morningstar £245 lower |
| £2m | £5,090 | £4,345 | Morningstar £745 lower |
Table: annual charges once income is being drawn, before the Novia Global per-event charges. Not a quote.
The drawdown figures above are before the Novia Global per-event charges. As an illustration, a member with £300k who crystallizes once and then takes a monthly income paid to a UK bank account would pay about £1,772 in the first year with Novia Global, being £1,410 plus £200 for the crystallization and £162 for twelve payments out, against £1,335 with Morningstar, or £1,530 including its one-off establishment charge for a new account. Every further crystallization adds £200 with Novia Global and nothing with Morningstar.
The net cost once withholding tax and cash interest are counted
Charges are only part of the cost, and two further items move money in the same direction. On Novia Global, US equity exposure has to be held through UK or Ireland-domiciled funds, which lose US withholding tax on their US dividends. On Morningstar, cash earns interest, at 0.35 per cent below the US Federal Reserve rate on US dollars, which for a US resident holding dollar cash has been paying around 3 per cent, while Novia Global pays nothing on a cash holding it requires to be at least 2 per cent of the account. The table below takes deliberately modest assumptions: US-source income of 0.5 per cent a year, 15 per cent withholding, a 2 per cent cash holding on both platforms and interest of 3 per cent on that cash. Together they are worth around 0.13 per cent a year in favour of Morningstar, before any difference in charges. Novia Global charges are reduced to reflect that it does not charge on cash.
| Pension value | Novia Global, net | Morningstar, net | Difference |
| £300k | £1,465 (£1,240 charges plus £225 withholding) | £1,030 (£1,210 charges less £180 interest) | Morningstar £435 lower |
| £500k | £2,185 (£1,810 charges plus £375 withholding) | £1,470 (£1,770 charges less £300 interest) | Morningstar £715 lower |
| £1m | £3,750 (£3,000 charges plus £750 withholding) | £2,220 (£2,820 charges less £600 interest) | Morningstar £1,530 lower |
| £2m | £6,360 (£4,860 charges plus £1,500 withholding) | £3,020 (£4,220 charges less £1,200 interest) | Morningstar £3,340 lower |
Table: illustrative net annual cost while building the pension, before fund charges, dealing costs and advice fees. Withholding and interest depend on the yield, the US share of the portfolio and the rates at the time. Not a quote.
At £500k that is roughly 0.44 per cent a year on Novia Global against 0.29 per cent on Morningstar, and the gap widens again in drawdown, where Novia Global adds £200 per crystallization and £13.50 per payment out. With more US-source income, or more cash, the gap is wider still.
Want the comparison on your own numbers?
We model Novia Global and Morningstar side by side on your pension values and how you plan to take income, including fund and advice costs.
Custody, Safety and Regulation
Both SIPPs are UK-registered pensions, recognized as pensions under the US-UK tax treaty, with assets held in trust separately from the provider. Novia Global uses BNY Mellon Pershing (Channel Islands) and Morningstar uses Northern Trust (Channel Islands), both part of one of the two largest custodian groups in the world. The SIPP schemes themselves are both UK-registered pensions run by operators regulated by the Financial Conduct Authority. The difference is the investment platform underneath: the Novia Global platform is fully regulated in the UK by the Financial Conduct Authority, while the Morningstar Wealth International platform is based in Jersey and regulated by the Jersey Financial Services Commission. For a US resident, the bigger risk is usually not provider failure but a provider that does not accept US residents and closes the account. Both of these accept US persons into the SIPP by design.
Taking Income From the US
Benefits can currently be taken from age 55, rising to 57 from 2028. Both providers currently pay withdrawals in sterling, so a US resident drawing income carries currency exposure on every payment, and that needs to be built into the income plan. Novia Global plans shortly to allow benefits to be crystallized and withdrawals to be paid in foreign currencies, which would let a member spending in another currency avoid converting from sterling on every payment. The other difference is cost. On Morningstar, one £125 a year income charge covers every crystallization and every payment. On Novia Global, each crystallization costs £200 and each payment out £13.50, so phased withdrawals, which are one of the approaches used where the US treatment of the 25 per cent tax free lump sum is a concern, cost more on Novia Global than on Morningstar.
Advice and Self-Investing
Both platforms are adviser-only, and a US resident needs advice from an adviser with SEC authorization. Neither can be self-invested from the US. We cover each in Can You Self-Invest in a Novia Global SIPP? and Can You Self-Invest in a Morningstar International SIPP?. Cameron James USA advisers hold individual SEC authorization, which is what allows us to advise on the SIPP, an ISA and an investment account together. We do not charge an initial advice fee on US-connected investments, such as your ISA and investment accounts. Our ongoing advice fee and the platform and fund costs still apply.
Switching From Novia Global to Morningstar
Moving between the two is a transfer between UK registered pension schemes, so the money stays inside the UK pension system and keeps its status under the treaty. Novia Global charges £250 to transfer out to another UK pension. Morningstar charges a one-off £195 establishment charge. Together those come to £445. Holdings can sometimes move in specie, depending on the funds held. Whether switching is worth it depends on your pension size, how you plan to draw income, and whether you need US-domiciled funds or a home for money outside the pension. On our net figures, which count the withholding tax and the cash interest, the saving at £300k is around £435 a year, so the £445 is typically recovered in a little over a year, and faster on a larger pension. On charges alone it takes longer for a smaller pension that is still being built. Our UK pension transfer guide for US residents covers the process end to end.
A Note From Jonathan Laws
Frequently Asked Questions
Is Novia Global or Morningstar better for US residents?
Morningstar, clearly. It gives access to US-domiciled funds, which avoid the US withholding tax suffered inside UK and Ireland-domiciled funds and make it the only option of the two for anyone concerned about PFIC. It can also hold an ISA or investment account for a US person, it pays interest on cash, and it is cheaper at every size we model. Novia Global remains a sound choice for a smaller pension-only plan with little US equity exposure.
Can a US resident hold either SIPP?
Yes. Both accept US persons into the SIPP, provided it is opened and managed through an adviser with SEC authorization. Neither can be opened or run on an execution-only basis from the United States.
Which is cheaper, Novia Global or Morningstar?
On the schedules applying to Cameron James clients, Morningstar is cheaper at every size we model: by £50 a year at £300k while building the pension and by £75 a year at £300k in drawdown, before Novia Global charges £200 per crystallization and £13.50 per payment out. Morningstar has a one-off £195 establishment charge and Novia Global has none. Count the US withholding tax avoided by US-domiciled funds and the interest paid on cash, and that adds at least around 0.13 per cent a year in favour of Morningstar, making the gap at £500k around £715 a year on our deliberately modest assumptions.
Do PFIC rules apply inside either SIPP?
PFIC tax is generally not expected on holdings inside either SIPP during accumulation, because a reporting exception applies to PFIC interests held through a treaty-recognized foreign pension fund. Reporting may still apply in some circumstances. Only Morningstar offers US-domiciled funds, for anyone who wants to take PFIC out of the picture altogether.
Does US withholding tax affect the funds inside the SIPP?
Yes, on Novia Global. UK and Ireland-domiciled funds holding US shares typically lose 15 per cent of their US dividends to US withholding tax, which cannot be reclaimed. On US-source income of just 0.5 per cent a year that is 0.075 per cent of the pension a year. US-domiciled funds held in the Morningstar SIPP avoid it, and on our working view no US withholding is expected at the level of the SIPP. This is a professional view, not formal tax advice.
Can I hold US-domiciled exchange traded funds?
On Morningstar, yes, in the SIPP and, through the US Taxpayer Service, in an ISA or general investment account. Novia Global does not accept US-domiciled funds onto its platform at all, so US exposure there is held through UK or Ireland-domiciled funds, which suffer US withholding tax on their US dividends.
Does either pay interest on cash?
Morningstar pays interest on cash, at 1 per cent below the Bank of England base rate on sterling and 0.35 per cent below the US Federal Reserve rate on US dollars. Novia Global pays none and requires a minimum 2 per cent cash holding. Rates are variable and set by the provider.
Can I move from Novia Global to Morningstar?
Yes. It is a transfer between UK registered pension schemes, which keeps the pension within the UK system and preserves its treatment under the treaty. Novia Global charges £250 to transfer out to another UK pension, and Morningstar charges a one-off £195 establishment charge, so £445 in total.
Can I self-invest in either from the US?
No. Both are adviser-only, and advice to a US person generally has to come from an adviser with SEC authorization. There is no execution-only route into either platform for a US resident.
Novia Global, Morningstar, or both?
One conversation will show you which suits your UK pension as a US resident, what a transfer involves and what it costs. Fee-only, no commission.
Related Articles
Existing Cameron James USA articles covering the questions that come up alongside this one.
Morningstar International SIPP Review for US Residents
Our full review of the Morningstar SIPP for US residents, including the US Taxpayer Service.
Novia Global SIPP Review for US Residents
Our full review of the Novia Global SIPP for US residents, including its charges for taking income.
SIPP Providers That Accept US Residents: The 2026 Shortlist
Every provider that can compliantly hold a UK pension for a US resident, and how they differ.
UK Pension and SIPP Transfer for US Residents
The full transfer guide, from options to process.
Can You Self-Invest in a Morningstar International SIPP?
Why the platform is adviser-led.
Can You Self-Invest in a Novia Global SIPP?
Why the platform is adviser-led.
Can a US Resident Keep a UK ISA?
The ISA rules after a move to the US, and where the PFIC exposure sits.
Information:
Where this article includes information from other parties, we use sources we consider reliable, but we cannot guarantee that all of it is accurate or current. Nothing in this article is legal, accounting or tax advice. Rules in these areas are complex and depend on your personal circumstances. Please take advice from a qualified professional if required.
Jonathan Laws, ACA Ch.FCSI, Senior Independent Financial Adviser, Cameron James
“Novia Global and Morningstar are the two SIPPs we use most for clients in the US, and both are a long way ahead of the UK providers that close accounts once they find a US address. But for a US resident they are not equal. Morningstar can hold US-domiciled funds, which avoids the US withholding tax that quietly costs a portfolio of UK and Irish funds every year, it can take the ISA and the investment account as well as the pension, it pays interest on cash, and it charges one flat fee for taking income. For our US clients that settles it. ”