+ Larger Font | + Smaller FontSaving for a pension is one of the biggest financial responsibilities you will have in life. Therefore, planning should not be taken lightly and it is imperative that you find a pension that is suitable to provide you with sufficient income when in retirement.
One of the options you have is the SIPP (Self Invested Personal Pension). A SIPP gives the policy holder a far greater level of flexibility and choice over conventional pensions and gives you the financial freedom to make your own decisions.
In summary, you have the choice of where you pension will be invested, whereas with conventional pensions your investment choices are severely limited to what the pension company provides.
SIPPs are ideal for those who want to have complete control over the direction their pension fund takes. You are able to invest up to 100% of your annual income into your SIPP fund, but it should be noted there is a limit not exceeding GBP245K.
One of the other advantages of SIPPs over conventional pensions is that you can receive a tax relief on all of your income. You can even receive tax relief on a fund for your children, leading many to use SIPPs as a method to invest for their children. It should be noted however that if the total amount invested exceeds GBP1.75M, any excess can be taxed at 55%.
You can even use your SIPP to purchase a property in our out of the UK. While sounding like a more exciting and rewarding manner of saving for your pension, you should be aware that SIPPs are suggested for people with some basic level of investment knowledge. Like with all pensions, you cannot start enjoying the benefits from your SIPP before the age of 55.
The Next Step
It is strongly recommended that you seek expert financial advice when planning for your pension. Firstly you need to consider whether a SIPP or a more conventional pension is better suited to your needs. Should you decide that a SIPP would be a better method for you, you will need to consult with an adviser to decide upon the best investment strategy that suits your attitude to risk. When applying for a SIPP, you can either start from scratch, or transfer any existing pension funds over to your new plan.
When it comes to how to best invest your money, you should consult with your advisor which investment strategy would be generate an income for your retirement. The options with SIPP’s are vast, they include unit trusts, commodities, currencies, commercial properties, UK and overseas companies shares, endowment policies, gilts and futures to name just a few. Whilst this may sound daunting, a good financial advisor will be able to recommend a plan that is both affordable and suits your investment needs to properly generate an income for your retirement.
Frozen Pension Review Service:
Please take advantage of a free, no obligation review with one of our recommended, independent pension advisers. During which they can discuss some of the various options open to you.
