SIPP Pension

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SIPP or Self Invested Personal Pension scheme is a pension scheme that is recognised by the UK pension legislation. A Self Invested Personal Pension or SIPP pension can give you security and comfort after your retirement. Though its terms and conditions are similar to other personal pension plans, it’s your best choice if you want to have more freedom and flexibility when dealing with your investments. Find Out More About Your UK Pension.

Difference between SIPP and other schemes

The pension company usually manages the funds with no input from you as to how your funds are invested. With an SIPP1  investment, you are actively involved in planning the investment strategy for your funds – as long as these comply with the conditions set by HMRC.

You can even borrow money so you can fund other investments. You can steer your investment plan in any direction you like but make sure you understand all the risks so your investments do not go to waste. If you have a keen eye for financial strategies, then use this to your advantage.

Is this investment right for me?

An Self Invested Personal Pension investment is the most viable option for you if you have a substantial pension fund and if you deal with almost every type of investment. Since you are not tied up to a fixed annuity rate, you can use this to your advantage when planning your investment strategies. You get to enjoy the benefits and boost the growth potential of your funds. Another important aspect to keep in mind is superannuation. Make sure you are well informed.

How much can I invest in a SIPP pension?

You can invest up to £245,000 annually until you are 75 years old. Nevertheless, you still decide how much you want to pay and how long you are going to pay for it – as long as it does not exceed the lifetime limit of £1.8m as of 2011.

What can be included in a SIPP investment?

  • Bank accounts
  • Insurance funds2 
  • Commercial property
  • Investment trusts
  • Government securities stocks
  • Overseas stocks and shares
  • National savings products
  • Traded endowment policies
  • Mutual investment funds

What can I pay for a Self Invested Personal Pension?

What you invest in a SIPP pension is your Relevant UK Earnings. Its main sources can be your salary (if you are an employee) and your profits (if you have your own business). If you are not working, you can only invest up to £3,600 annually.

Advantages of a SIPP

  • The choice is yours. Since it’s your contract with your name on it, you can choose whatever investment strategy to increase the growth potential of your funds.
  • You can use it for a wide range of investments like real estate deals, commercial properties, stocks and shares, and other asset types.
  • You can take a lump sum3  up to 25 per cent tax free from your fund
  • You can have access to your money through a regular periodic income. It can be free of tax depending on the country’s double taxation agreement with UK.
  • Other insurance policies are based on a percentage value – the cost you pay increases as the fund increases. With this type of personal pension scheme, the cost decreases as the fund increases.

Who benefits from this pension scheme?

Anyone between the ages of 18-75 can benefit from a SIPP. Different SIPP providers offer different SIPP schemes depending on the lifestyle and business situation of the client.

Cost of a SIPP Investment

The cost for setting up a SIPP investment depends on the pension provider you choose and the types of investments you are dealing with. These include the following:

  • Initial fee, which can cost as much as £500
  • Transfer charges for moving a fund from your current pension scheme4   to a SIPP
  • Investment fees every time you make an investment or move your funds from one place to another
  • Management fee, which is taken from you annually
  • Interest rates, which can range from 0 per cent to 5 percent, depending on the investment value

Are there any limitations

  • You can only have access to your funds when you reach the age of 55
  • Transferring your money from one pension scheme into a SIPP pension might mean loss of some rights and privileges from your existing pension provider or insurance company
  • There’s a risk of decreasing the value of your funds or of getting fewer benefits
  • Charges apply if you want to have access your funds

Choosing the right SIPP pension

The correct SIPP pension will depend upon the type of investments you would like to hold. You can contact us and speak to our reputed financial adviser to find out which investments would be a perfect match to your specific lifestyle and business situation.

Choosing the right SIPP pension

The correct SIPP pension will depend upon the type of investments you would like to hold. You can contact us and speak to our reputed financial adviser to find out which investments would be a perfect match to your specific lifestyle and business situation.

Different structures that SIPP providers offer

Each Self Invested Personal Pension structure has its own advantages and disadvantages. You have to determine your specific priorities, needs, and expectations so you can maximise the growth potential of your assets and properties.

  • Independent SIPP – allows you to deal with all types of assets5  and investments
  • Insured Corporate SIPP – a combination of a conventional personal pension scheme and occupational scheme where you are required to have an external fund manager to be able to invest in specific assets and properties
  • IFA SIPP – you have an adviser to assist you in management of your assets and funds
  • Low cost SIPP – allows you to deal with stock broking services

Size of pension

A reputable pension company makes sure that they have the client’s best interest at heart and will not offer something to promote its own investments. It should advise the possible client that if the pension fund is under £100,000, a low cost SIPP would suit him/her better. But if the client believes that his/her pension fund can increase rapidly, the SIPP company should offer a fund-based SIPP.

Helpful tips in choosing the best providers

Choose a pension company that is known for its flexibility, longevity, and service.

  • Look into the number of years that the provider has been involved in offering a SIPP
  • Make sure that the SIPP it offers is a registered pension scheme as defined under the Finance Act 2004
  • It is a trustworthy SIPP if it allows you to deal with all HMRC approved investment options
  • Self Invested Personal Pension lets you decide which investments you want to deal with, including the advisers you want to assist you
  • The company communicates regularly and gives all necessary information to educate you about its different SIPP schemes
  • The company’s service is characterized with efficiency and accuracy in terms of systems and procedures demonstration to all possible clients
  • The company has the required technical expertise to meet the expectations of HMRC
  • The company has a transparent charging structure
  • The company encourages a dynamic relationship between its account managers and its clients
  • A reputable pension provider has a website that offers full range illustrations of its SIPP schemes
  • Make sure they are able to advise whether a SIPP or a QROPS is in your best interests

Got a Question About UK Pensions?

Want to Chat With the Leading UK Pensions Expert in the UK?

Regulations are constantly changing, but we’ve found the leading UK Pensions expert in the UK and he’s willing to answer your questions or assist if possible. Hundreds of people have saved a fortune on tax with some of his structures.

If you’d like us to connect you with him, please get in touch below.

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