SIPP Pensions

Self Invested Personal Pensions – SIPPs

The earlier you can start planning for retirement, the better prepared you will be to make the most of your later years – as we all need to supplement the state pension. Exploring your pension options is an important step in the process.

What is a SIPP?

Self Invested Personal Pensions, also known as SIPPs, is a type of personal pension, it works in a similar way to a standard personal pension but allows you to save for retirement in a flexible and tax efficient way.

What are the different types of SIPP?

SIPPs can offer you a wider range of investment options including commercial property.

Who should consider a SIPP?

Many people choose a SIPP because they are a good way to prepare for income drawdown from your pension. They are also popular with those that want to gain more control of their pension and potentially increase growth.

Some people set up a SIPP to consolidate a number of existing pensions into a single fund. You will need a certain level of understanding of investments as you will need to decide on the funds, stocks and shares that you want to support.

Generally, Sipps are suitable for those who:

• are comfortable with making investment decisions
• have a larger pension ‘pot’ or who plan to make large pension contributions
• have a financial adviser helping them to make decisions
• wish to consolidate their pensions into one place
• want to keep their money invested after they retire and draw down an income

How much do SIPPs cost?

It’s important to explore the potential costs of any SIPP before signing up. Your provider will deduct charges from your pension pot no matter how your investments have performed. You will either pay a fixed admin charge or a percentage fee, plus dealing costs for buying and selling shares.

Do I get tax relief on a SIPP?

As with other pension schemes, you get tax relief on contributions of up to 100% of your annual salary, to a maximum of £60,000 per tax year (based on 2024/25).

When you retire you can take the money from your SIPP as a cash lump sum, or draw down an income, or you can set up an annuity.

What do I need to consider?

A SIPP could be a good idea if you like the idea of investment choice and have a large amount of retirement savings to invest. But if your money is currently in a defined benefit scheme, also known as a Final Salary Pension, it can often be better to leave the funds where they are.

Defined benefit schemes give you a guaranteed pension and offer generous benefits for spouses that are not usually available in money purchase schemes.

How can CT Wealth Management help me?

Here at CT Wealth Management, we’re a team of experienced financial advisers who will help you make informed, tax efficient plans for the future.

By getting to know you and your specific financial situation – as well as your goals for the future – we can help you take charge of your money. We support clients with savings and investments, pension planning, small business advice and ways to mitigate your income tax.

We are an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is fully authorised and regulated by the Financial Conduct Authority, so get in touch today to discuss your financial needs and how we can help.

The value of investments and any income from them can fall as well as rise. You may not get back the amount originally invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.