SIPPs or Self-Invested Personal Pension plans were introduced in 1991 by the UK government to give people more control over their personal pension than if they invested solely via a pension company.
This blog overviews the basics of SIPPs to help you understand the features of these special pension plans, how they work and who they are suitable for.
So let’s start with the most important question:
A SIPP is a do-it-yourself pension. You put your pension into a SIPP and control where your savings go and how they grow.
You can also use a SIPP to consolidate your individual pension pots into one big pot. That way, you can easily monitor and manage your pensions and cut down the paperwork that comes with running multiple pension pots.
Regarding investments, SIPPs allows you to invest your savings in:
This helps you diversify your retirement portfolio and improve your returns.
SIPPs offer the same great tax benefits as other pension plans. So, for example, if you’re a basic-rate tax payer, you can get a tax relief of 20% on your SIPP contributions. Similarly, if you’re a higher-rate tax payer, you can get a tax relief of up to 45% on the money you put into a SIPP.
With so many features and benefits on offer, anyone can be tempted to own a SIPP pension scheme london. However, a SIPP may not always be the right solution for everyone.
Some individual pension plans come with special incentives and protections. Opting to move your pension out of such plans could mean giving up on those incentives and protection. This may negatively impact your final collections which you’d want to consider before taking any decision.
The best way to deal with this problem is to take professional advice. A person knowledgeable in the world of pensions would be able to guide you better whether a SIPP is right for you or not.
This brings us to the end of our post. We hope you enjoyed the read. If you have any questions about SIPPs, please don’t hesitate to reach out; our best sipp provider london pension experts will be happy to guide you.
For further reading: What’s Better – Funds or Shares?
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