Why choose a SIPP
By Darren Reynolds - Chartered Financial Planner
A SIPP is a Self Investment Personal Pension and is fully
regulated! This gives you protection from the Financial Conduct
Authority and the Financial Services Compensation Scheme.
A SIPP gives you excellent flexibility and opportunities.
If you want to unleash yourself from pension providers and take
control of your own retirement planning with a low-cost option,
then a self-invested personal pension might be the route for
Risk - You have full control of whether you wish your
investments to be in low, moderate or high risk. Or you may
wish to have some exposure to all three categories. When you
get closer to retirement, low risk or cash is certainly an option to
consider. It is your choice, you are in control.
Whereas traditional pensions typically limit investment choice to
usually funds run by the company’s own fund manager a SIPP
lets you invest almost anywhere you like and choose your own
investments. This may be particularly attractive at the moment
when there is so much uncertainty in the stock markets. We can
give you fully regulated advice around this. Although
investments can go down as well as up we believe greater
freedom and flexibility is best to try and avoid the downside.
The SIPP provider we use allows you full access to your
investment portfolio 24/7, with low annual management
Favourable tax status - Like all pensions, any money paid into a
SIPP receives up-front tax relief at your marginal rate of income
tax. The administrator automatically reclaims 20% basic rate tax
from the Government, So if you want to add £1,000 to your
SIPP, you only need to pay £800, as HMRC will contribute £200
to it. Higher rate taxpayers can claim further tax relief – another
20% or 25% - through their annual tax return.
c 2015 Celtic Wealth Management & Financial Planning Ltd.
Any returns you make on investments inside a SIPP are free
from income tax and capital gains tax which will help your
retirement savings grow faster.
Take control of your existing Pensions - If you have built up a
number of pensions with different employers over the years, you
may find it difficult and time consuming to keep track of your
overall pensions. You will more than likely be paying an Annual
Management charge for each plan! There is only one annual
management charge for a SIPP. You can move all your plans
into one SIPP! We will give you fully regulated advice as what to
do in relation to your final salary pensions. If it is not in your best
interest to move them we will tell you!
SIPPs, like other pensions, allow you to take as much of your
fund in cash as you want when you reach the minimum
retirement age, currently 55 (rising to 57 by 2028). You have
freedom to choose how you take your pension benefits, it’s
entirely flexible, the only rule is that the first 25% you take is tax-
free and the rest is taxed at your marginal rate.
You can pay into a SIPP in the same tax year as you contribute
to another pension scheme: for example, to make full use of
your annual tax-efficient allowance (£40,000 or 10% of your
annual earnings, whichever is lower.
The flexibility that SIPP’s offer when you take pension benefits
again mean that this can be your main source of income or can
supplement the other schemes you have. For example you may
use a SIPP to build up supplemental savings and maximise tax
efficiency and then withdraw lump sums over a few years using
Flexi-Access Drawdown for house repairs, a new car and
possibly to pay for a couple of holidays; whilst you rely on your
main pension savings to provide a retirement income.
Please contact Celtic Wealth Management if you would like a
free no obligation meeting to discuss your options.
Celtic Wealth Management is the trading name of Celtic Wealth Management & Financial Planning Ltd.
Celtic Wealth Management and Financial Planning Limited have put together a group of specialists who we work closely with and are
leaders in their field in order to offer our clients the best products on the market. All regulated advice in relation to Pensions and Investments
is given by Darren Reynolds, Chartered Financial Planner or his qualified advisors of Active Wealth (UK) Ltd, which is regulated by the
Financial Conduct Authority.
Whilst every effort has been made to ensure that articles are correct, Celtic Wealth Management and Financial Planning Limited can't take
any responsibility for its content and readers are advised to check their validity for themselves. Celtic Wealth Management and Financial
Planning Limited and its divisions are not liable for any financial product purchased or financial advice provided through a third party
Financial Advisor, Mortgage Advisor or Will Writer. Neither Celtic Wealth Management and Financial Planning Limited or any of its divisions
are regulated by the Financial Conduct Authority and as such do not offer advice.
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