A self-invested pension plan (SIPP) is a type of pension that lets you decide what you want to do with your contributions. You can invest your money where you want and manage your pension yourself. This flexibility is what makes SIPPs different to other types of pension where someone looks after your contributions and invests them on your behalf.
Some of the investments you can choose include:
- Unit trusts
- Gilts and corporate bonds
- Commercial property (Commercial mortgages are not part of our offering, however, we have links to experts in this field and will help you on a referral basis.)
The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.
Some are higher-risk than others, so it’s a good idea to do some research before you start investing or put your money in a few different funds to spread your risk.
Some SIPPs (known as ‘full SIPPs) come with access to professional investment advice you can call on, but you’ll have to pay extra for this.
How much can I pay into a SIPP each year?
The rules around SIPPs are the same as any other personal pension. As a reminder that means you can invest a maximum of:
- 100% of your earnings (up to £40,000) in a year
- The lifetime allowance for most people is £1,073,100 in the tax year 2023/24. In previous years, you would have paid a lifetime allowance charge on any pensions savings over this amount. But from 6 April 2023 that charge has been removed.
Also like other personal pensions, the government pays at least 20% of the total amount you invest in your SIPP. Higher-rate or Additional-rate taxpayers can claim back an extra 20% or 25% through their self-assessment tax returns.
Contributions can be made monthly or as a lump-sum. You can also transfer from other pension pots. Just bear the limits in mind if you do this.
What do I need to think about?
- You can usually only access the money from age 55 (57 from 2028) and you can access 25% of your pot tax free
- Most SIPPs are managed online so you can keep an eye on your investments
- Sometimes the charges (e.g. dealing charges/annual share charges) can outweigh the benefits
If you’d like to talk to us about SIPPs, please use the pop-up form on the right of this page. If the telephone’s more your thing, please dial 01244 47010 . You can also send an email to: email@example.com
The value of investments can fall as well as rise. You might get back less than you invested.
Tax treatment varies according to individual circumstances and is subject to change.
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