Benefits of a SIPP

Just like other personal pensions, SIPPs are a tax-efficient way to save for your retirement.

SIPPs vs. other personal pensions – the main differences


SIPPs Other personal pensions
Tax-efficient

Can be used alongside a company pension

Widest investment choice

Transfer other investments, including shares

Take your pension benefits in stages

A wider investment choice

A SIPP gives you more choice than a regular personal pension. Investment choices include:

Taking your pension benefits

With regular personal pensions, you have to buy an annuity when you retire. This gives you an income in retirement, but it can be restrictive.

A SIPP is different. It also gives you the option of income drawdown. So instead of using your pension fund to buy an annuity, you can withdraw part of it each year and leave the rest invested.

This option can be particularly useful if you're thinking about working part time for a while instead of giving up work completely. It also means you're not tied in to annuity rates which could be low at the time when you retire.

How can SIPPs help me achieve my retirement goals?

Invest up to £40,000 a year, tax-free

During the tax year 2014/15, you can invest up to 100% of your UK earnings in a SIPP or £40,000 – whichever is greater. You'll get tax relief on all your contributions during that year.

Is a SIPP right for you?

If you're not sure that a SIPP is the right investment for you, speak to a financial adviser.

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