A SIPP (Self-Invested Personal Pension) is a UK-based personal pension regulated by the Financial Conduct Authority (FCA) which allows clients to choose from a wide range of investments approved by HM Revenue & Customers (HMRC). It is a more flexible type of pension, giving members the ability to choose (with the help of a financial adviser) where and how their money is invested, when they want to start receiving benefits (from age 55) and who they want to leave their residual pension to following their demise.
Moving your pensions to a SIPP removes the need to purchase an annuity. Instead, members can leave their money invested and drawdown an income from the capital, which is widely regarded as better value for money in today’s low interest rate environment. A SIPP also allows you to take advantage of Uncapped Flexi-Access Drawdown, whereby members can choose how much money they wish to withdraw on an ad hoc basis.
The benefits of transferring to a SIPP include the following:
- Approved by HMRC
- Full control over investments with the aid of a financial adviser
- Control over when and how you take benefits from age 55
- Access up to 25% of fund value as tax-free cash
- No need to purchase an annuity
- Uncapped Flexi-Access Drawdown
- Pass your pension on to named beneficiaries of your choice
- No need for probate on the proceeds following death
- Depending on country of residence in retirement, income from a SIPP could be free of income tax
- No inheritance tax
- Consolidate all of your pensions into one easy to administer scheme
- Clients with UK earnings can claim tax-relief on new contributions
There are many benefits to transferring your pensions to a SIPP and which features are most relevant to you will depend on your personal circumstances.
For further information, please contact us.