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
- Investment 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
- £1.03m over your lifetime (the current lifetime allowance)
Also like other personal pensions, you’ll get 20% tax relief on all pension contributions if you don’t exceed these limits. 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?
- Money can be taken out of a SIPP at 55, 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 470 107. You can also send an email to: firstname.lastname@example.org
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