What is a SIPP?
A SIPP, or Self Invested Personal Pension, is a type of personal pension, rather than an occupational or employer pension.
It holds investments in what is called a wrapper, and one you retire you can draw an income. The kin different between this and a normal personal pension is the flexibility it provides in terms of the investment that can be held.
Typically personal pensions and occupational pensions are managed on your behalf, however a SIPP provides the freedom for you to choose and manage your own investments. Given this aspect to it, it’s most definitely not for everyone.
Whilst the potential benefits can be much higher than a normal personal and occupational pension, the risk are also significantly greater.
Most people who choose a SIPP are likely to be experienced investors with much larger funds. The investment rules and regulations can be quite complex, with certain investments allowed, such as stocks and shares, Unit Trusts, Investment Trusts, Government securities and commercial property, others are prohibited, such as residential property. But again, there are some exception here.
Ultimately, if you are considering a SIPP as a pension option, professional advice is always recommended.
Recently gone self-employed?
Contact a member of the team at Aberdein Considine to discuss your retirement planning options.
Based on tax legislation at the time of publication. Please be aware that there will have been changes since this was published. Speak to your adviser for the most up to date information.
