AdviceOnline | Self Invested Personal Pensions
Self Invested Personal Pensions
A self Invested personal Pension SIPP is a type of personal pension designed for people who want greater flexibility on how to manage their own fund. Sipps have the same tax advantages that a normal personal and stakeholder pension may have where contributions will attract tax relief at your highest rate however it has the potential to provide some good tax planning solutions. Please remember that the tax relief is dependant on your own personal circumstances and that tax rules may change in the future
With a standard pension which you generally purchase from an insurance company you make the contributions choose a fund or
funds and then the fund managers will make the investment decision on your behalf.
With a Sipp whilst you can also let the provider make the investment decision for you most Sipps allow you to invest in a wide range of conventional and alternative funds and other investments such as commercial property Shops Offices factory premises. You can have as much or as little control over the assets that you invest in. The choice of available funds is largely dependant on the Sipp provider so it is essential that expert financial advice is taken to find a Sipp that is suitable for you.
Sipps often have higher charges associated with them as opposed to stakeholder and personal pensions given the greater investments flexibility. For this and the choice of investment they are generally suited to those individuals that have large funds experienced in investing or will utilise the range of investments that are permitted within the Sipp wrapper.
The maximum that you can invest each year into a pension is strictly controlled by legislation. The maximum amount is currently limited t your net relevant UK earnings or the annual allowance currently £255000 tax year 2010/11. You must also be aware of the lifetime allowance which is calculated on ALL your pension funds. If you exceed the lifetime allowance currently £1.8 million then there may be substantial tax penalties up-to 55.
It is important that you consult an experienced Independent Financial Adviser who can discuss all your options and help you save for retirement in a tax efficient manner. We can arrange for an experienced and fully qualified independent financial adviser to contact you to fully discuss your retirement plans with you.
With a standard pension which you generally purchase from an insurance company you make the contributions choose a fund or
funds and then the fund managers will make the investment decision on your behalf.
SIPP
With a Sipp whilst you can also let the provider make the investment decision for you most Sipps allow you to invest in a wide range of conventional and alternative funds and other investments such as commercial property Shops Offices factory premises. You can have as much or as little control over the assets that you invest in. The choice of available funds is largely dependant on the Sipp provider so it is essential that expert financial advice is taken to find a Sipp that is suitable for you.
Sipps often have higher charges associated with them as opposed to stakeholder and personal pensions given the greater investments flexibility. For this and the choice of investment they are generally suited to those individuals that have large funds experienced in investing or will utilise the range of investments that are permitted within the Sipp wrapper.
The maximum that you can invest each year into a pension is strictly controlled by legislation. The maximum amount is currently limited t your net relevant UK earnings or the annual allowance currently £255000 tax year 2010/11. You must also be aware of the lifetime allowance which is calculated on ALL your pension funds. If you exceed the lifetime allowance currently £1.8 million then there may be substantial tax penalties up-to 55.
It is important that you consult an experienced Independent Financial Adviser who can discuss all your options and help you save for retirement in a tax efficient manner. We can arrange for an experienced and fully qualified independent financial adviser to contact you to fully discuss your retirement plans with you.
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