7/30/2019 Self-Invested Personal Pension

1/4

Self-InveSted

PerSonalPenSIonS

A GUIDE TO

Is it time to take more control

over your pension fund investments?

7/30/2019 Self-Invested Personal Pension

2/4A guide to Self-Invested Personal Pensions02

A guide to Self-Invested Personal Pensions

A guide t Self-InvestedPesnal PensinsIs it time t take me cntl ve yu pensin fund investments?

If you would like to have more control over your own pension fund and be able to make

investment decisions yourself with the option of our professional help, a Self-Invested

Personal Pension (SIPP) could be the retirement planning solution to discuss.

Mor ASSIII

A SIPP is a pesnal pensin wappe that

ffes individuals geate feedm f chice

than cnventinal pivate pesnal pensins.

Hweve, they ae me cmplex than

cnventinal pducts and it is essential yu

seek expet pfessinal advice.

SIPPs allw invests t chse thei

wn investments appint an investment

manage t lk afte the ptfli n

thei behalf. Individuals have t appint atustee t vesee the peatin f the SIPP

but, having dne that, the individual can

effectively un the pensin fund n his

he wn.

H A IS o A SIPP

As a egisteed pensin scheme, a SIPP

ffes a numbe f diffeent tax advantages:

n Pesnal cntibutins attact tax elief

up t yu maximum ate, within the

elevant cntibutin limits

n ntibutins made by yu emplye

ae nt teated as a benet f tax

pupses, pviding they ae within the

elevant limits

n u accumulated savings gw fee fm

capital gains tax and incme tax liability

(althugh the ntinal tax n dividends

cannt be eclaimed)

n In the event f death befe etiement,

the accumulated fund can nmally

be distibuted t yu spuse and/

dependents, fee fm capital gains tax,incme tax inheitance tax (subject

t a maximum f all pensin benets f

1.5m f the 2013/14 tax yea; educing

t 1.25m f 2014/15)

n Up t 25 pe cent f the accumulated

fund can be taken as a tax-fee lump sum

when yu stat t take the benets

orIUIoS S

Pvided yu ae eligible t make

cntibutins, yu can typically pay int

yu SIPP as much as little as yu chse.

his can be a cmbinatin f pesnal and/

emplye cntibutins and can be made

n a ne-ff egula basis.Althugh thee is n limit t the level

f cntibutin, thee is a limit n the

level f tax elief available. he limit is

knwn as the annual allwance. he

cuent amunt f yu pensin savings

that benets fm tax elief is cuently

limited t 50,000. m tax yea 2014/15

nwads the annual allwance will educe

t 40,000.

Incme tax elief is nt available f

pesnal cntibutins which exceed

eaned incme, althugh egadless f

eanings, mst peple can cntibute

3,600 pe annum int a SIPP the

pensin aangement and still eceive basic

ate tax elief at suce.

An emplye can eceive elief against

cpatin tax f cntibutins pviding

they can be justied as whlly and

exclusively f the pupse f thei tade.

oSoIAIISI PSIoS

If yu aleady hld a ange f diffeentpensin benets, eithe fm pevius jbs

yu wn pesnal pensins, a SIPP

culd be ne way t cnslidate these

int ne ptfli. We can advise yu if we

ecmmend whethe yu shuld cnslidate

yu existing pensin aangements.

HoUSAS o US

u can typically chse fm thusands f

funds un by tp manages as well as pick

individual shaes, bnds, gilts, unit tusts,

investment tusts, exchange taded funds, cash

and cmmecial ppety (but nt pivate

ppety). Als, yu have me cntl ve

mving yu mney t anthe investmentinstitutin, athe than being tied if a fund

unde-pefms. once invested in yu

pensin, the funds gw fee f UK capital

gains tax and incme tax (tax deducted fm

dividends cannt be eclaimed).

oHr oSIrAIoS

u cannt daw n a SIPP pensin befe

age 55 and yu shuld be mindful f the

fact that yull need t spend time managing

yu investments. Whee investment is made

in cmmecial ppety, yu may als havepeids withut ental incme and, in sme

situatins, the pensin fund may need t

sell n the ppety when the maket is nt

at its stngest. ecause thee may be many

tansactins mving investments aund, the

administative csts ae highe than thse f

a nmal pensin fund.

he tax benets and gvening ules

f SIPPs may change in the futue. he

level f pensin benets payable cannt

be guaanteed as they will depend n

inteest ates when yu stat taking yubenets. he value f yu SIPP may be less

than yu expected if yu stp educe

cntibutins, if yu take yu pensin

ealie than yu had planned. n

7/30/2019 Self-Invested Personal Pension

3/4A guide to Self-Invested Personal Pensions03

A guide to Self-Invested Personal Pensions

Althugh annuity atesgeneally incease with

age, defeing yu pensinbenets may nt be in yunancial inteests due tthe way annuity ates aecalculated by life fces.

III o rIrMMst peple can stat taking incme fm

age 55. When yu stat t take the benefits, up

t 25 pe cent f the accumulated fund can

usually be taken tax-fee.

At et iement yu can stat tak ing benefits

fm yu SIPP eithe by puchasing an annuity

dawing an incme fm yu fund (knwn

as incme dawdwn). his can be a f lexible

way f taking benefits fm yu SIPP withut

buying an annuity.

Whee an annuity is puchased, all f the funds

ae paid t an insuance cmpany wh will pvidea guaanteed level f incme thughut the

emainde f yu life. hee ae diffeent types

f incme that may pvide f cntinuatin t a

suviving spuse afte death, pvide f inceases

in payment. With the exceptin f unit-linked

with-pts annuities, cntl f the assets f the

SIPP is cmpletely lst upn annuity puchase.

PAI A IoM

one featue f incme dawdwn is that, in the

event f death, the full fund can be used t pay

an incme t a suviving spuse dependent

child, can be paid as a lump sum (subject t

tax at a ate f 55 pe cent) t the spuse, the

beneciay, estate.

his is a featue that attacts many individuals

t taking benets using incme dawdwn, but

yu shuld seek pfessinal advice in de

t establish whethe it is apppiate in yu

cicumstances.

If yu daw a high incme fm the fund it may

esult in a substantial esin f the amunt f

fund available t puchase a pensin annuity.

SUI oUr IrUMSAS

Whee benets ae taken in the fm f incme

dawdwn, the funds emain within the SIPPand investment cntl is etained by yu. his

ffes exibility because the level f incme can

be vaied and the puchase f an annuity can be

defeed t suit yu cicumstances.

he venment Actuaies epatment set

maximum levels f incme available f capped

dawdwn aangements. Hweve, f thse wh

ae aleady in eceipt f a pensin meeting the

Minimum Incme requiement (pesently

20,000 pa), exible incme dawdwn is available

which allws an unlimited pecentage f the fund t

be dawn as taxed incme.Althugh annuity ates geneally incease with age,

defeing yu pensin benets may nt be in yu

nancial inteests due t the way annuity ates ae

calculated by life fces.

7/30/2019 Self-Invested Personal Pension

4/4

ldmine Media, asepint Innvatin ente, 110 utteeld, eat Malings, utn, edfdshie U2 8

Articles are copyright protected by Goldmine Media Limited 2013. Unauthorised duplication or distribution is strictly forbidden.

he venment has set a limit n hw much yu can build up in pensin savings withut paying a tax chage. his is called the

lifetime allwance and is cuently 1.5 millin (but will educe t 1.25 millin in 2014/15). ividends eceived within a SIPP dnt cme with a 10 pe cent tax cedit, s basic ate taxpayes ae n bette ff eceiving dividends within a SIPP than eceiving

the dividends diectly. Invests in a SIPP need t be cmftable making thei wn investment decisins abut thei etiement.

Investments g dwn in value as well as up s yu culd get back less than yu invest. he ules efeed t ae thse that

cuently apply; they culd change in the futue. u cannt nmally access yu mney until at least age 55. ax eliefs depend

n yu cicumstances. If yu ae unsue f an investments suitability yu shuld seek pfessinal nancial advice.

We can explain in plainEnglish how a SIPP couldhelp you to plan for your

retirement. To discuss yourrequirements please contactus for further information

dont leave it to chance.

ntact us tday.