Sipp - Self-Invested Personal Pension

What is a SIPP?

A Self Invested Personal Pension, known as a SIPP, is a personal pension for which the person investing for retirement decides what their pension fund is invested in. Traditionally pensions are managed by a pension fund manager who may invest in volatile stocks and shares or cash and the investor has no control or influence on this decision.

This is a complex area and it does need professional advice. We have access to one of the UK's leading independent wealth management consultancies who specialise in pensions and investments. They will carry out an initial review completely free of charge to assess whether your existing pension plans may be transferred into a SIPP and advise you accordingly

Did you know, using a SIPP you may be able to invest in luxury hotels in carefully selected 5 star resorts from around the world with the potential of receiving a Guaranteed 10% return for the first 2 years, rental income all year round and Capital Growth?

It is understandable that in order to retire in the modern world you need to have a secure retirement. The issue is not having a pension; the issue is having a pension that will grow into a significant fund - and when the uncontrollable urge arises to give up work it is easy to see how quickly people's pension fund fitters away.

An Increasing numbers of people are finding themselves with more and more debts and are unable to retire. Therefore it is becoming increasingly popular for them to seek ways of increasing their pension through a SIPP.

People think there is no alternative but to keep working to pay off their debts in order to retire, but all they end up doing is spending years working, which means the actual retirement date never arrives - the amount of money they actually need to retire - never or barely materialises.

It is a vicious circle and in this current global financial crisis, people in debt are no longer able to retire. This is because they are not aware there may be a way to invest their pension in a SIPP.

Most type of pension schemes only accept cash however a SIPP can be used to include assets such as shares or commercial property. Virtually any type of pension can be transferred and used to set up a SIPP as the Rules allow this. It is common for what is deemed "Frozen Pension" i.e employee pensions that were set up through company schemes and who no longer work for that particular company and it is quite common for people to have had several of these if they have moved from job to job over a period of time. As they are "frozen" i.e no further contributions have been made since the employee left the company and depending on how long the person worked for the company there may be a pot of money in the pension that under SIPP Rules could potentially be transferred into a SIPP.

You may have also had pensions set up whilst in business or personal pensions these can also be transferred under SIPP rules and be used to setup a SIPP.

So under SIPP rules this is what happens. The asset is valued. It then automatically gets a 20% tax credit. Suppose the asset is £80,000 (and Sipps are intended for larger funds although you can start with £5,000), the taxman makes this up to £100,000. The extra £20,000 is in cash which can be turned into shares or other investments or kept in the bank account section of your Sipp.

When the person owning the Sipp then fills out their tax form at the end of the year, assuming that they are a higher rate taxpayer, they will then be able to claim a cash rebate equivalent to the difference between the 20 per cent credit already received into their fund and the 40% tax rate.

Because your £80,000 asset is the net amount, it has to be "grossed up" and, because of the wonder of percentages and Revenue maths, this gives a further £33,333 so you know have £133,333. It's up to you how to use the extra £33,333.

Once the SIPP is setup under the rules an Investor can make further ongoing contributions into the SIPP and the rules allow full tax relief of up to 40% this means that if a 40% taxpayer contributed £100,000 then it may only cost him under the SIPP rules £60,000.

Also the SIPP rules allow for the possibility to increase the amount of funds available to the SIPP by borrowing up to a further half i.e 50% of the value of the SIPP, as an example if a SIPP has a fund of £250,000 under the rules it can borrow another £125,000 this will provide a total of £375,000 available to invest.

SIPP Benefits

If you wish to contribute cash into the SIPP under SIPP Rules you can receive up to 40% tax relief

Under Sipp rules Property can be purchased using the Sipp fund

Rental Income is paid into the SIPP allowing the fund to grow

No Capital Gains Tax on Property Investments within a SIPP

Under SIPP Rules there are No tax liabilities when property is sold

No requirement for Cash Investment

SIPP Rules state that No Dividends can be taxed on Property Investments in a SIPP

Potential Inheritance Tax benefits may help to protect business assets

Pre agreed lending liability based on the property asset and NOT the individual

SIPP Rules allow Contributions into a SIPP are to the age of 75

Under SIPP Rules a syndicate can be set up so that two or more persons can pool their pension funds to invest, ideal for husband and wife/partner or group investment.

Virtually all types of pension can be invested into a SIPP

Provides a tax efficient way to invest for your retirement

As previously mentioned we strongly recommend that you take independent advice and with the links we have with experienced and qualified SIPP advisers you can be assured that your best interests will be looked after.

The popularity of Self-Invested Personal Pensions - or 'SIPPs' - over the last decade, it is important to discuss retirement savings plans with SIPPs in mind.

SIPPs are an alternative to the standard inflexible and possibly poor returns from traditional Personal Pensions (PPs), however Sipps allow you to manage your own personal pension assets whilst giving you the benefits of the same tax and contribution rules as with any other kind of pension.

The SIPP provide individuals with the freedom to put together a portfolio of investments from the entire range of HM Revenue and Customs (HMRC) approved assets. Basically they allow you to consolidate smaller pension funds into one scheme.

Investing in commercial property is a popular reason for choosing a SIPP in the first place, yet few schemes run by the large providers offer their customers this option. So to have access to the full list of HMRC-approved investments and to make sure you are maximising your pension fund, savers are choosing to convert their pension to a SIPP through a fully qualified Independent Financial Advisor (IFA).

However, not all Sipps allows you to invest in commercial property, and criticism has been raised at to the limited experience some firms have at providing 'SIPPS'. Companies have been accused of capitalizing on the popularity of Sipps to promote a limited number of investments.

Here is an example of the list of investments:
With a SIPP you'll be able to invest in any of the following assets:

* Investment trusts
* Single company shares
* AIM company shares
* Cash
* Gilts / bonds
* Unquoted shares
* Traded endowments
* Derivatives (including futures and options)
* Commercial property
* Overseas investments

What makes a SIPP different?

You can convert your pension to a SIPP through one of our recommended IFAs, so you will have access to a full range of investments to choose from. If you want invest now or you may wish to invest as your pension fund grows, either way you need a SIPP that allows you flexibility to grow.

A wider range of investments provides a potentially higher return, so you can fully benefit from the autonomy and flexibility your Sipp investment portfolio are designed to give you.

Turning your pension into a SIPP

To find out more and if you qualify for a SIPP and to see if your existing pension is eligible to be invested in a SIPP, register your details below.

You'll be able to discuss your needs with a FSA-regulated Independent Financial Advisor, and arrange for a fast and hassle-free pension-to-SIPP conversion

The adviser will look at SIPP providers and identify the most suitable SIPP for you. There is no charge for the adviser to identify your SIPP requirements.

The popularity of self-invested personal pensions (Sipps) has been on a powerful upward trajectory for the past couple of years, as a growing number of investors consolidate and take control over their pension funds.

Figures from the latest Sipp survey in April 2008 show 240,000 plans in existence, compared with just 80,000 five years earlier. One of Sipp providers Total sales for its best-selling Sipp were up by more than 53 per cent for the 2007-08 tax year, compared with the preceding 12 months.

But while the idea of moving your pension funds into a Sipp may appeal, identifying the most appropriate product for your needs can be daunting: the 50 providers in the market all seem to operate different charging structures and different investment choices.

This is one area where the services of our linked independent financial adviser (IFA) specialising in pensions can be particularly valuable. An adviser will be able to help in the choice of investments to hold within your Sipp, and advise on the most reputable, efficient and cost-efficient Sipp providers.

Whether or not you decide to use our IFA, it's worth understanding the range of options available, as Sipp providers come in several forms. At one end of the spectrum are the low-cost online providers catering mainly to individuals prepared to make their own investment choices without the help of a financial adviser. These include Hargreaves Lansdown, Sippdeal, James Hay's e-Sipp and Fidelity FundsNetwork.

Then there are the insurance companies that have traditionally offered personal and stakeholder pensions and have now widened their range to include Sipps.
Some offer what are known as hybrid Sipps, requiring clients to put a certain amount of their investment into in-house funds before they can branch out into a range of externally-managed funds.

Some insurance houses also have deferred Sipps, where the client chooses from in-house funds but has the option to move into a more flexible, wider range of investments and manage them himself at a later date - for example, once his fund is large enough. But the Financial Services Authority has expressed concern that some investors may be paying for a level of flexibility that they are not actually using, so it's important to clarify exactly how the charges work.

'Full' Sipps are available from a variety of smaller or specialist Sipp providers, as well as from certain insurers, notably Standard Life. These offer a wide range of Sipp investments including the spectrum of collective funds, single company shares, bonds, cash, overseas investments, traded endowments, derivatives and, in some cases, commercial property. Typically, they will cost more than those focusing on collective funds, particularly where property is concerned.

So what should you consider when you are deciding where to put your pension and setting up a Sipp? The most important thing to consider is to identify your own attitude to risk and your investment goals. Then we can help you find a plan that offers access to appropriate investments.

To find out more and if you qualify for a SIPP and to see if your existing pension is eligible to be invested in a SIPP, register your details below.

You'll be able to discuss your needs with a FSA-regulated Independent Financial Advisor, and arrange for a fast and hassle-free pension-to-SIPP conversion

The adviser will look at SIPP providers and identify the most suitable SIPP for you. There is no charge for the adviser to identify your SIPP requirements.

Our goal is to provide you with access to professional SIPP advice that ultimately covers all the aspects of investing your pension by way of a SIPP such that you receive the necessary SIPP advice to be certain that the investment is correct and right for you.

To find out more and if you qualify for a SIPP and to see if your existing pension is eligible to be invested in a SIPP, register your details below.

You'll be able to discuss your needs with a FSA-regulated Independent Financial Advisor, and arrange for a fast and hassle-free pension-to-SIPP conversion.

The adviser will look at SIPP providers and identify the most suitable SIPP for you. There is no charge for the adviser to identify your SIPP requirements.

For further details visit http://www.s-i-p-p.co.uk/