Self-Invested Personal Pensions (SIPPs)

Deck Chair and Palm TreeOver the past decade pensions have changed beyond recognition. On one hand successive governments have continued to alter the legislation in the hope of encouraging more of us to save for retirement – with no clear success. On the other hand a number of pension ‘scandals’ have removed confidence in this huge financial sector. SIPPs (Self-Invested Personal Pensions) could be the answer for those seeking control in a world where it is easy to have that control taken away from you.

Pilling & Co’s SIPP is one of the cheapest and simplest available but still provides our renowned high service standards. As was the case in the early nineties when Pilling revolutionised Self-Select PEPs, we are again offering an adaptable investment vehicle for pension investors, making it realistically available with our SIPP.

Self-Invested Personal Pensions (SIPPs) were launched by the Government in the 1989 Budget to allow independent investors to choose and control their own investments in a form which is tax efficient. There is no income tax on income arising on investments and no capital gains tax.

Here are some of the benefits of Pilling SIPPs:

  • There are no hidden bid/offer spreads, initial units, transfer or early retirement penalties.
  • The full fund value is available on death before age 75 which, if unvested, can normally be paid as a lump sum free of Inheritance Tax (subject to lifetime allowance).
  • You receive tax relief at your marginal rate on personal contributions (subject to HMRC limits and your tax status).
  • Your pension fund accumulates free of income tax or capital gains tax for the chance of greater growth.
  • Up to 25% of your pension fund (subject to lifetime allowance) may be taken as a tax-free cash sum at retirement. Additional lump sums may be taken subject to tax.
  • You do not have to actually retire from work to take your benefits (vesting) – a pension may normally be vested at any time after your 55th birthday, although there are plans to raise this age to 57.
  • You need not buy an annuity from an insurance company but can draw an income from your fund while keeping full investment control. This is called Income Drawdown and there are different rules depending upon when payments began and how much is being drawn.
  • Using Income Drawdown, you can take the maximum tax-free cash from the SIPP, while reducing the immediate pension income (to zero if you wish) until a higher level is needed. This can assist capital growth and reduce your tax bill.
  • You can leave a pension fund after your death for the benefit of your spouse or, to your chosen inheritors. Depending on how you arrange your nomination of beneficiaries you may be able to leave your pension fund to your children outside of your estate and without suffering inheritance tax (IHT).

If you would like more information about transferring to Pilling & Co, or opening a SIPP please visit the links and downloads below or call us on 0161 819 4836 between 8.00am and 5.15pm on any business day when there is always somebody here to help you.

Further SIPP Information