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December 10, 2024Are you considering your SIPP options?

A Self Invested Personal Pension, or SIPP is a type of personal pension that gives you a range of options and consequently, a level of freedom, about how you invest your retirement funds.

What are the advantages of having a SIPP?

A SIPP has the potential to give you more control over how and where your money is invested. In addition, SIPPs offer the same tax benefits as other pensions. For example for every £8,000 you contribute to your SIPP, the government pays in £2,000 and if you are a higher rate tax payer in the UK, you can claim further tax relief.

For those who appreciate choice, SIPPs have the potential to give you access to a market-wide range of investments, including bonds, shares, investment trusts, exchange traded funds (ETFs) and exchange traded commodities (ETCs).

Who can have a SIPP?

Any UK resident under the age of 75 can pay into a SIPP. Even if you are not presently earning, you can contribute up to £2,880 net each tax year and receive tax relief. Parents are able to open a Junior SIPP for their children, although the child will not be able to access their pension, under current legislation, until they reach 55 years of age (this will change to 57 from 2028).

What investments can I transfer into my SIPP?

You can transfer an existing pension into a SIPP, where suitable. In addition, you can also make both regular and one-off payments into your SIPP.

Your employer can also potentially make contributions to your SIPP, either as regular or as a one off payment.

When can you use the investments in your SIPP?

Once you reach 55, you have the flexibility to decide how and when to use the fund built up in your SIPP to provide you with an income. You can take up to 25% of your fund as a tax free lump sum and use the balance to provide you with a pension through income withdrawal from your SIPP or through the purchase of an annuity. In addition, you can also take a series of lump sums from your SIPP.

Equerry can help

If you are keen to explore how a SIPP could benefit you, make contact with us at Equerry, so that we can explain in more detail, what SIPP options are suitable for your specific requirements.

Important information: SIPPs are a type of pension for people wishing to have more flexibility with invest­ment decisions. You can normally only access the money from age 55 (57 from 2028). Before transferring a pension please ensure you will not lose valuable guarantees or incur excessive transfer penalties. Tax benefits and allowances described in this document are based on current legislation and HM Revenue & Customs practice and depend on personal circumstances. You should not take, or refrain from taking, action based on the content and no part of this document should be relied upon or construed as any form of advice or personal recommendation.

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