What is a SIPP and how can it benefit you?
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We sit down with a self-invested pensions expert to learn more about investments, saving for the future and providing for family in retirement.
Will Self is the CEO of Curtis Banks, a self-invested pension specialist provider with offices across the UK, including one in Ipswich. Here, he tackles your most commonly asked pension questions and reveals how a SIPP can benefit you.
Q: First, can you explain, what is a SIPP?
A: SIPP stands for self-invested personal pension. It’s like a DIY pension pot, that offers you greater control over your money. You can pay in personal contributions and decide how the money is invested.
Employers have no involvement in setting up a SIPP; it’s a contract between you and your chosen pension provider. However, employers can still pay contributions to SIPPs. SIPPs are ideal for individuals who want more involvement in their pension, but we would always recommend that you seek the help of a professional financial adviser before making a decision.
Q: How does a self-invested personal pension work?
A: You begin by choosing a SIPP provider and the specific product that you want. You can then decide how you’ll pay into the personal pension. You can make contributions, or transfer funds from other pension pots. It’s common for people to have a few pensions from different jobs, and use their SIPP to consolidate the total amount.
You can then choose and manage your investments. There are many types to pick from, including standard stocks and shares, and more complex assets such as commercial property.
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Q: What are the benefits of a SIPP?
A: You have greater control over your money, from where it is placed through to greater flexibility over how you can withdraw the funds once you retire.
Most workplace auto-enrolment pension schemes do not offer you as much freedom. With a SIPP, you would usually work with a financial adviser and investment manager to decide how you want to save and grow your assets.
SIPPs are one of the most flexible pension choices, and will still entitle you to receive tax relief on contributions, tax free investment growth and, normally, protection from IHT (inheritance tax).
Q: How can I tell if a SIPP is a good option for me?
A: Working with a qualified financial adviser can help you find a product suitable for your circumstances.
You should consider how much ongoing involvement you want with your pension fund. You’ll also need to decide how much money to invest and explore what charging structures your pension provider offers. It’s also best to consider what your short-term and long-term saving goals are, as this can help you decide if a SIPP is the right pension product for you.
Q: Can you tell us more about the benefits of the 'Your Future SIPP' product that you offer?
A: Even among SIPPs, there’s a vast choice in the types of products available. We’ve designed Your Future SIPP to be as flexible as possible, so as your needs change, the product can grow and adapt with you.
We charge fixed fees, meaning you won’t pay more as your assets grow and will only pay for the features as and when you use them. All pension freedom options are also available for you to access your benefits, meaning you can use the fund in whatever way works best for you.
Q: Why choose a specialist SIPP provider?
A: We are one of the UK’s leading independent SIPP providers, offering high-quality customer service, a wealth of experience and passion for what we do.
If you want more control over your pension or are approaching retirement and want to better understand your options, we strongly recommend that you seek financial advice. You will need to speak with a financial adviser before applying for any of our SIPPs. If you don't have a financial adviser, you can find one using the Retirement Adviser Directory from MoneyHelper, which is a service provided by the government as part of the Money and Pensions Service.
To find out more about Curtis Banks visit curtisbanks.co.uk.
The value of pension funds may fall as well as rise. Your money is tied up until you take your pension benefits. Benefits can generally be taken any time after age 55, although this is due to increase to 57 in 2028.