What is a SIPP pension?
The term 'SIPP' stands for Self Invested Personal Pension. A SIPP is a type of personal pension scheme that is registered with HM Revenue & Customs in the UK.
With a SIPP account, you are in control of the decision making for your pension, rather than being controlled by an old employer or insurance company.
Why use a SIPP?
A SIPP account generally provides you with a greater amount of control and flexibility over the money in your pension than a typical employer pension or insurance company pension.
It gives you the freedom and flexibility over how you withdraw your money and the option to choose the investments within your pension.
SIPP account features
Control
You are in total control of your pension and your retirement.
Flexibility
A SIPP is flexible when deciding how and when to take withdrawals.
Tax free growth
The investments in your SIPP will grow free of any income tax or capital gains tax.
Access
You can start making withdrawals from your SIPP once you reach age 55.
What can a SIPP invest in?
SIPPs tend to allow a much larger range of investments and control compared to employer pension schemes. Under current HMRC rules, you are allowed to invest into a wide range of assets through a SIPP account, such as:
UK and Overseas Shares
Government and corporate bonds
Exchange traded funds
Collective investments such as mutual funds
Investment trusts
Fixed deposits
Your pension fund will generally grow tax free, as there is no income tax or capital gains tax on the investment held by your SIPP, as with all UK registered pension schemes.