Personal Pension
What is a SIPP?
A Self-Invested Personal Pension (SIPP) is a type of pension plan that gives you control over how your retirement savings are invested. As a defined contribution personal pension, the final value of your pension pot depends on the amount you pay in, the performance of your investments, and how much is charged in fees.
We provide details of the fees and the performance objectives for each fund.
Why do you need it?
A SIPP gives greater control and flexibility over your retirement savings. A SIPP allows you to choose your own investments, which can be beneficial for those who want to create their own portfolio. Additionally, SIPPs offer tax advantages, including tax relief on contributions and tax-free growth on investments.
The current pension rules are broadly:
You can contribute to as many pension schemes as you like.
The maximum you can contribute to your SIPP and receive tax relief is £60,000 in the current tax year, or 100% of your UK taxable earnings whichever is less.
If you haven’t used your Annual Allowance and been a member of a pension scheme in any of the three previous years you can use
You will receive full tax relief on your qualifying contributions. This means that if basic rate tax is 20%, for every £80 you invest HMRC will add £20. If you are a higher rate or an additional rate taxpayer, you can claim the additional tax relief through your annual self-assessment tax return.
The funds grow free from tax.
You can draw your retirement benefits at any time from age 55 - you don’t even have to retire to draw your benefits. From 6th April 2028, the minimum pension age rises to age 57 so from this date, you will need to be age 57 or older before you can start taking money from your pension.
You can draw up to 25% of your fund as a tax-free lump sum and the balance can be used to provide an income.
Tapered annual allowance
If you earn a high income, the government reduces or (“tapers”) your annual allowance. This is called the tapered annual allowance. If your threshold income is more than £200,00 and your adjusted income is more than £260,000 per annum then your annual allowance is reduced.
For every £2 your adjusted income is over £260,000 your allowance is reduced by £1.
The allowance can be tapered to as low as £10,000.
Example
Your adjusted income is £310,000 which is £50,000 over the £260,000 limit.
Your allowance is reduced by £25,000 (half of £50,000)
Your new annual allowance is £60,000 - £25,000 = £35,000
In simple terms, Threshold Income is your total taxable income, not just earnings, but excluding pension contributions. Adjusted Income is the same but includes all pension contributions, even those made on your behalf by your employer.
Is our SIPP right for you?
Our SIPP allows you to invest into a target-date fund which adjusts over time to align with your expected retirement date or create your own diversified retirement portfolio. You don’t need to be an expert to create your own portfolio as our Investment Management Team have analysed the whole of the market and have handpicked a selection of funds for you to choose from.
