Table Of Contents
- Difference Between SIPP And Other Schemes
- Is This Investment Right For Me?
- How Much Can I Invest In A SIPP Pension?
- What Can Be Included In A SIPP Investment?
- What Can Pay For A Self Invested Personal Pension?
- Advantages Of A SIPP
- Who Benefits From This Pension Scheme?
- Cost Of An SIPP Investment
- Are There Any Limitations
- Choosing The Right SIPP Pension
- SIPP Providers
- Different Structures That SIPP Providers Offer
- Size Of Pension
- Helpful Tips In Choosing The Best Providers
SIPP or Self Invested Personal Pension scheme is a pension scheme that is recognized by the UK pension legislation.
Though its terms and conditions are similar to other personal pension plans, it is 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 SIPP 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 funds
- Commercial property
- Investment trusts
- Government securities stocks
- Overseas stocks and shares
- National savings products
- Traded endowment policies
- Mutual investment funds
What Can Pay For A Self Invested Personal Pension?
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
Who Benefits From This Pension Scheme?
Different SIPP providers offer different SIPP schemes depending on the lifestyle and business situation of the client.
Cost Of An 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 scheme 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 is 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 advisor to find out which investments would be a perfect match to your specific lifestyle and business situation.
More and more people are investing in a Self Invested Personal Pension, not only to secure their retirement but also to gain more control over their investments.
Many pension providers would be more than willing to help you with your specific business situation. However, there are a few things you should know before investing in a SIPP.
We strongly advice you to talk to a reputable pension adviser before investing in a SIPP.
Make sure you are well informed before getting a private pension plan! Luckily for you we have all the information you need!
Different Structures That SIPP Providers Offer
You have to determine your specific priorities, needs, and expectations so you can maximize the growth potential of your assets and properties.
- Independent SIPP – allows you to deal with all types of assets 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 just 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.
Suggested further reading for a better understanding of how it functions.
Helpful Tips In Choosing The Best Providers
- 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