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Has
your employer recently closed their final salary pension
scheme or is there a threat of this happening? Are
your retirement planning needs slightly unusual or
do you simply want more flexibility about the investments
you make? If you can answer 'Yes' to any of these
questions, now is the time to talk to us so that we
can evaluate your retirement provisions. With the
varying performance of pension funds, a Self-invested
Personal Pension (SIPP) could be the ideal solution!
Increasing
control
SIPPs
were introduced for investors who did not fit the
typical mould. They are particularly attractive if
you feel that using a traditional pension, with its
limited range of funds, is too restrictive. Many of
our clients use SIPPs because they have substantial
retirement funds and require a more individual approach
to pension planning. Typically, they also want to
take more control of the investments behind their
pension funds.
Tax
advantages
Contributions
receive tax relief at your highest rate(s). This means
that if you are a higher rate taxpayer, you need contribute
only £60 of your own money to get £100 invested, thanks
to the £40 you will get back from the taxman. Basic
rate relief is credited to the fund, while the higher
rate relief has to be claimed back from the Inland
Revenue.
Diversified
assets
You
can actively choose where your money is invested or
we can help you with the investment decisions. Your
contributions can purchase investments over a wide
variety of assets, which could include insured funds
with different pension companies, direct investment
into shares, open-ended investment companies, unit
and investment trusts. Another investment could be
the purchase of a property to use as your office and
then rent it back to yourself.
This provides you with an unparalleled choice
in creating your own pension portfolio.
'SIPPs offer tremendous
investment flexibility, enabling a very personalised
portfolio to be created that has the ability to change
the investment strategy quickly.'
Retirement
stepping-stone
SIPPs
are commonly used as a stepping-stone into retirement
and for taking benefits through pension fund withdrawal.
The 1995 Finance Act introduced a facility that allows
you to draw an income from your SIPP (this also includes
personal pensions arrangements) but to defer the purchase
of an annuity until you reach the age of 75, at which
time an annuity must be purchased outright.
To
SIPP or not to SIPP? - that is the
question.
Read
the following questions and answer
'Yes' or 'No' to find out whether
a SIPP could be the right solution
for your retirement needs.
1.
Do you find traditional pension
plans, for example those offered through
insurance companies, too restrictive
for you?
2.
Would you like to have more
control of the investments in your
pension fund?
3.
Do you have a substantial amount
in your pension fund?
4.
Do you contribute modest sums
to your pension out of your monthly
income?
5.
If you are approaching retirement,
do you want to have the freedom to
vary the income within wide limits
from your pension fund?
6.
Do you prefer to leave your
investment decisions to someone else?
7.
If you are approaching retirement,
do you prefer the idea of having a
definite regular income?
8.
Is your pension fund your only
source of retirement income?
9.
Do you need to allow a definite
income for your dependants after you
die?
10.
Do you want to avoid having
all your investments in one place,
but at the same time dislike the idea
of having to deal with several different
pension policies?
Scoring:
Questions 1-5: If you answered 'Yes'
to three or more of the first five
questions, then a SIPP could well
be suitable for your pension needs
Questions
6-10: If your answer was 'Yes' to
three or more of questions six to
ten, then a SIPP may not be right
for you.
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