Self-Invested Personal Pension (SIPP) - Saving for Retirement

Self Invested Personal Pension Plans are a popular choice for those who want greater investment freedom. Most insurance company pension schemes offer little in the way of choice when it comes to investment and using a SIPP provides significantly greater control.

SIPP's have become more popular for pension transfers, normally from more basic Insurance Company contracts. Rather than selecting from a With Profits or Managed Fund, you can specifically choose exactly where your money is invested - to the exact share if you wish.

With the assistance of our Wealth Management service we can help you select investments that meet with your attitude to risk and investment objectives. Alternatively you can choose from over 2000 funds at discounted charges through our Online Service. Browse the pension funds available section.

You are still restricted to basic pension scheme regulation. Once your money is invested it cannot be accessed until age 55 - at which point you can draw a lump sum equal to 25% of the fund value and the remaining fund will be used to purchase an annuity. You are restricted to a maximum contribution that is the greatest of 100% of your salary or £3,600 in any one tax year. Employers can contribute significantly more. Just like a personal or stakeholder pension your fund cannot exceed a lifetime limit - which started in April 2006 at 1.5 million and will increase to 1.8 million in 2010. For those with pension funds exceeding this limit tax charges will be levied.

The Government intends, from April 2011, to restrict tax relief for individuals with an annual income of £150,000 or more. Relief will be tapered away so that those with an annual income over £180,000 per annum will receive 20% relief.

Preventative measures have been put in place from April 22nd 2009, restricting relief for those earning more than £150,000 to 20% on contributions in excess of £20,000.

The SIPPs we recommend have a built in Drawdown Option, which prevents an additional initial charge being levied should this method of withdrawing benefits be favoured at a later date.

SIPPs are just as flexible as Stakeholder Pensions, but will often be charged at a higher price. The price is determined by the underlying investments some of which may be more expensive than the 1% per year associated to a standard Insurance Company plan.