Self-invested personal pensions (SIPPs) Advice
In recent years the pensions industry has become more advanced in terms of the flexibility of investments available and the structure of the actual pension arrangements.
It is an area of constant change and you should consult us/me regularly to make preparations for a secure and enjoyable retirement.
Self Invested Personal Pensions (SIPPs)
A Self Invested Personal Pension (SIPP) is a tax-efficient wrapper within which a wide range of investments can be held. A new SIPP must appoint a scheme administrator, usually the recognised product provider. SIPPs have the same tax benefits and regulations as conventional personal pension plans but you and / or your advisers have control over the investment choice – each SIPP is unique to the individual. Otherwise, it operates in the same way as a conventional personal pension in respect of contributions and eligibility, for Her Majesty’s Revenue & Customs (HMRC) purposes.
The complex nature of a SIPP means that it is not suitable for all investors. Often, the benefits of ‘self investment’ are only advantageous to people with very large funds and / or investors with some level of sophistication when it comes to investment decisions. Often, there are additional charges for arranging and dealing within a SIPP and these charges would erode smaller funds quickly.
The benefits of using a SIPP include being able to invest in:
- Stocks and shares listed or dealt on an HMRC recognised stock exchange, including AIM
- Stock exchanges that are not recognised by HMRC, e.g. OFEX.
- Unit trusts, open ended investment companies (OEICs)
- Warrants, covered warrants
- Government stock and fixed interest stock
- Unquoted shares
- Commercial property & land
- Property funds
SIPPs allow individuals to consolidate deferred company and private pensions in one place, take control of their savings and invest more flexibly into a wider range of assets and funds. However, advice should be sought before transferring any previously accrued pension, especially when such pensions are from defined benefit (final salary-related) schemes.
Goldsborough Wealth, through its Wealth Management Service, uses low-cost SIPPs to build bespoke investment portfolios tailored to each client’s needs. We can offer a low cost SIPP with access to over 1000 collective investments funds (unit trusts, OEIC’s etc) with no initial charge and competitive ongoing fees. So, there is no need for our clients to put up with lacklustre insurance company performance any more. People with old fashioned expensive pension plans may also be better off switching to a low-cost SIPP.
In addition, we have our own administration systems that allow us to provide a bespoke pension solution, which can include an SIPP arrangement.
Pensions are a long term investment. You may get back less than you put in. Pensions can be and are subject to tax and regulatory change; therefore the tax treatment of pension benefits can and may change in the future.