Self Invested Pensions - SIPP and SSAS
Self Invested Personal Pensions (SIPPs) have experienced huge growth as the public realise that whilst pensions offer unrivalled tax breaks, pension companies have rarely proved to be the best investment managers. A Self Invested Personal Pension (SIPP) or the corporate equivalent, a Small Self Administered Scheme (SSAS) provides a pension 'wrapper' whilst the investor may choose the underlying investments.
Whilst the traditional SIPP market for those holding shares and commercial property still persists the biggest growth has been from investors who have built up pension funds and are now seeking greater control and choice over their investments.
The leading SIPPs will also offer Drawdown and Phased Retirement facilities to give total flexibility in both investment and retirement options.
What Is A Self Invested Personal Pension (SIPP)?
A SIPP shares all of the tax reliefs and features of a personal pension but whereas a standard personal pension will invest in pension funds, the SIPP may hold assets selected by the investor.
What assets can a SIPP invest in?
The list of approved investments include:
•Conventional insured pension funds.
•Stocks and shares (eg equities, gilts, debentures etc) quoted on the UK Stock Exchange and unlisted securities.
•Overseas stocks and shares both listed and unlisted.
•Unit trusts, OEICs and investment trusts.
•Insurance company managed funds and unit-linked funds.
•Deposit accounts.
•Commercial property.
•Intellectual property
What assets are not permissible?
HMRC impose severe tax penalties on a scheme holding prohibited investments so it is not a good idea! These include:
•Loans to members and connected persons.
•Residential property, holiday homes, beach huts, timeshare accommodation.
•Machinery.
•Tangible moveable property including wines, vintage cars, yachts, jewellery, paintings and other pride in possession articles.
•Stamps and autographs.
•Gold bullion and coins.
This list is not exhaustive and an investor should seek advice before making any investment.
How Are Benefits Paid Out?
Benefits can usually be taken at any time after the age of 55 and the Drawdown and Phased Retirement facilities available with conventional pensions are available; please consult the ‘Retirement Choices’ section for more details.
The value of investments can fall as well as rise and you may get back less than the amount invested.
Whilst the traditional SIPP market for those holding shares and commercial property still persists the biggest growth has been from investors who have built up pension funds and are now seeking greater control and choice over their investments.
The leading SIPPs will also offer Drawdown and Phased Retirement facilities to give total flexibility in both investment and retirement options.
What Is A Self Invested Personal Pension (SIPP)?
A SIPP shares all of the tax reliefs and features of a personal pension but whereas a standard personal pension will invest in pension funds, the SIPP may hold assets selected by the investor.
What assets can a SIPP invest in?
The list of approved investments include:
•Conventional insured pension funds.
•Stocks and shares (eg equities, gilts, debentures etc) quoted on the UK Stock Exchange and unlisted securities.
•Overseas stocks and shares both listed and unlisted.
•Unit trusts, OEICs and investment trusts.
•Insurance company managed funds and unit-linked funds.
•Deposit accounts.
•Commercial property.
•Intellectual property
What assets are not permissible?
HMRC impose severe tax penalties on a scheme holding prohibited investments so it is not a good idea! These include:
•Loans to members and connected persons.
•Residential property, holiday homes, beach huts, timeshare accommodation.
•Machinery.
•Tangible moveable property including wines, vintage cars, yachts, jewellery, paintings and other pride in possession articles.
•Stamps and autographs.
•Gold bullion and coins.
This list is not exhaustive and an investor should seek advice before making any investment.
How Are Benefits Paid Out?
Benefits can usually be taken at any time after the age of 55 and the Drawdown and Phased Retirement facilities available with conventional pensions are available; please consult the ‘Retirement Choices’ section for more details.
The value of investments can fall as well as rise and you may get back less than the amount invested.