SIPPS - a pension worth considering
Author: Paula
Article added: 30th March 2012
If you're currently looking into your pension options, you've probably come across SIPPS; a SIPP pension is a great way to enjoy more flexibility with your retirement finances and should definitely be among your considerations.
The benefits of a SIPP pension
One of the biggest draws towards a SIPP pension is the degree of flexibility that they offer. SIPPS allow you to choose from a much greater number of investment options in comparison to other types of personal pensions, which in turn means that you have more control over what happens with your money. However, you can still receive the same tax advantages as you would enjoy with other types of pension - which is always good news!
SIPPS give you several options when it comes to drawing a retirement income which can also be very attractive to investors. You can secure an income via an annuity, draw an unsecured income directly from a SIPP investment sum, or, if preferred, choose a combination of these. When you retire, your SIPP pension will also enable you to take 25% of your accrued funds as a lump sum, totally tax free.
When choosing your investments with a SIPPS, you can select from a wider range than usual, which could include bonds, shares, commercial property or trusts. However, a meeting with a financial adviser will give you further insight to the other options that may be available to you.
SIPPS and inheritance
If you choose a SIPP pension, when you die, your loved ones will receive the remainder of your fund, minus tax payable on any money already taken, as an inheritance, which will be subject to full tax relief. This means that a SIPPS can benefit both yourself and your family.
Perhaps one of the best things about a SIPPS is that you can use them as a 'pension wrapper'. If you've already got one or more pensions, or other investments, a SIPP pension will also allow you to bring them all together, making it easier to keep an eye on things.
Because of their increased flexibility, a SIPPS could be the perfect way to put you in the driving seat and follow your own retirement path. It's worth bearing in mind though that with any kind if investment, whether it be a SIPPS or anything else, it's always a good idea to seek advice from a professional financial adviser before you commit to anything - so contact an adviser today to find out if a SIPP pension could be the retirement answer that you're looking for.
What you Need to Know About Sipps
Author: Emma
Planning for your retirement can be a difficult task due to there being so many pension plans on the market. It is important to do a lot of research in order to find the plan that suits you. This article is going to focus on Self Invested Personal Pension Plans (SIPPs).
A SIPP is a type of pension plan. It differs from a traditional pension plan as it allows you greater control as to how to invest your funds and when and how they can be taken as retirement income.
A SIPP allows you to invest in a broader range of areas than other plans. You are free to move around your investments whenever you like. You can manage the investments yourself, appoint a financial adviser or appoint an investment manager to advise you or manage your investments.
Members also benefit from tax relief. For example, if you invest £780, the government will add £220. It is also possible to take out a lump sum of 25% tax free at 50 (55 from 2010). It is also possible to purchase commercial property using your SIPP fund. You can contribute up to 100% of your yearly earnings.
What are the advantages? The main advantages are tax benefits and relief, flexibility and the fact that you have the control over your investments.
What are the disadvantages? The main disadvantage is that SIPPs are only suitable for certain individuals. It can also be expensive especially if the value of your funds is low. There can be SIPP administration charges, in addition to fund management charges and possible professional fees if a financial adviser and/or investment manager is used.
About the Author:
Emma is currently working for Stadia Trustees Limited who specialise in
SIPPs .