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SIPP

What is a SIPP?

Tax efficient retirement savings

A Self Invested Personal Pension (SIPP) is a tax efficient way to invest for your retirement or your child's retirement, which gives you control over where and when you invest.

A SIPP may not be appropriate for everyone, but for those with investment experience or the time to manage their own investments, it can be well worth considering.

Like all pensions, a SIPP offers tax relief on contributions. The tax benefits will depend on your circumstances and tax rules are subject to change by the government. SIPPs are governed by HMRC rules covering how much can be invested in any tax year.

Choose a SIPP with Selftrade for:

  • Flexibility – a choice of accounts
  • Control – investors can set their own investment strategy and choose where and when to invest
  • Portability – the rules for SIPP transfers are the same as those for personal pensions, meaning that it is generally possible for a SIPP to be transferred to an occupational pension scheme, personal or stakeholder pension. SIPPs can also accept transfers from various types of pension plan

Find out more

  • See our free Guide to SIPPs, produced in association with Investors Chronicle
  • Work out how much you should be putting aside for your pension with our pension calculator

SIPP dealing account

At a glance At a glance

Invest in a wide range of investments

  • A variety of investments to suit your retirement planning including UK and international shares, bonds and gilts, funds, ETFs, ETCs, warrants and covered warrants. Plus, where facilitated by your Trustee, other asset classes too.

Choice of trustee/administrator

Please ensure you read and understand the investment risk warnings and other important information

Offers

Choose your preferred pension trustee/administrator or take advantage of our specially negotiated rates with some of our partners.

Sovereign SIPP

At a glance At a glance

SIPP management

  • Complete service including SIPP Administration and Trustee services provided by our partners, European Pension Management (EPM) for just £95 + VAT. 'Nominee account' structure enables us to carry out your instructions with minimum fuss and maximum efficiency - whilst you remain the beneficial owner.

Invest in a wide range of investments

  • Choose from our complete range of SIPP eligible stockmarket-based investments - UK and international shares, ETFs, ETCs, Bonds & gilts, Funds, Warrants and Covered Warrants.
  • Choice of draw-down options: Flexible, Capped-Income, Annuity.

Exclusive 'Trade Bundle' option

  • When you have a good idea of your likely annual trading activity, our Trade Bundle, available only for use with a Sovereign SIPP - can be a great way to save money compared to our standard dealing tariff.

    • Save £25 p.a. with our 10 Trades Bundle for £100,
    • Save £70 p.a. with our 20 Trades Bundle for £180.

    And if you use-up your Trade Bundle, you can simply buy another bundle to save even more. The Trade Bundle is valid for 12 months starting from the date the trades are added to your account. Once the Trade Bundle has been fully used or has expired, our standard dealing charges will apply unless you purchase another Trade Bundle.

    Plus, make use of our Regular Investment, Dividend Reinvestment services and our fee-free Fund purchases without using-up your bundle trades

    Please read the Terms applicable to Trade Bundles.

Please read the:

and

Please ensure you read and understand the investment risk warnings and other important information

Child SIPP

At a glance At a glance

Flexible, tax efficient investing for your child's retirement

  • Invest in a SIPP on behalf of a child or grandchild and contribute up to £2,880 p.a. Your Trustee /Administrator claims basic rate tax relief, taking it up to a maximum of £3,600.
  • Investments are managed by the parent, grandparent or guardian until the child reaches 18, when they take control of the SIPP, although the assets must remain in the pension until retirement
  • Can be set up either via a Sovereign SIPP or SIPP dealing account

Invest in a wide range of investments

  • A variety of investments that enables you to invest over the long term for your child's eventual retirement, including UK and international shares, bonds and gilts, funds, ETFs, ETCs, warrants and covered warrants

Choice of accounts

  • You can choose from two options.
    • For market based investment account choose a Sovereign SIPP
    • for market based investments and opportunities to invest in other asset classes choose a SIPP dealing account

Choice of trustee/administrator

  • Choose your preferred pension trustee/administrator from over 70 providers, or take advantage of our specially negotiated rates with two providers:
    • European Pensions Management
    • Sippdeal

Please ensure you read and understand the investment risk warnings and other important information

Offers

Choose your preferred pension trustee/administrator or take advantage of our specially negotiated rates with some of our partners.

Pension allowances

For tax year 2011/12
Lifetime allowance (LTA) £1,500,000 (reduced from £1,800,000 with effect from 6/4/2012)
Annual allowance (inclusive of your own contribution and any other amounts paid into an approved pension scheme) £50,000 (gross), with up to three-year 'carry-back'
Max. pension commencement lump sum 25% of pension benefit value
Max. relievable personal contribution 100% of relevant UK earnings or £3,600 (gross) whichever is the greater
Lifetime allowance charge if excess drawn as cash 55%
If drawn as income 25%
Annual allowance charge Your marginal tax rate

Changes from 6 April 2012

The following changes were introduced with effect from 6 April 2012. Details are provided for information only: they reflect Selftrade's understanding of the legislation and Treasury guidance and may be subject to changes. You should check with your pension provider or financial adviser for full details and to determine how they may apply to your personal circumstances.

Lifetime allowance (LTA): reduced to £1,500,000 subject to transitional 'Fixed Protection' arrangements. ('Fixed Protection' application must have been made by 5 April 2012. Refer to your pension trustee/administrator or financial adviser for further details.)

Small pension pots: where your total pensions savings do not exceed £18,000 you may take them as a lump sum, with a proportion being subject to income tax at your marginal rate.

Additionally, subject to certain conditions being met, an individual pension plan worth less than £2,000 can be paid out as a lump sum to individuals ages 60 or over regardless of the overall total of their pension savings. However, any one person can only have a maximum of two lump sum payments in their lifetime. Refer to your pension trustee/administrator or financial adviser for further details.

Maximum pension commencement lump sum: 25% of the lifetime allowance, currently £375,000 (£450,000 where the £1.8m LTA appies).

Protected rights: protected rights (rebates into your personal pension of monies that would have otherwise provided with the State Earnings Related Pension Scheme (SERPS) supplement to your state pension) will be treated as any other pension benefit.

Useful links

  • The value of investments can fall as well as rise and any income from them is not guaranteed. You should be prepared to lose your investment. Past performance is not a guide to future performance.
  • Selftrade provides you with a range of tools and information to help you make informed investment decisions but does not provide investment advice. If you are in any doubt as to the risk or suitability of an investment or product you should seek advice from an independent financial adviser.
  • The extent and value of any SIPP tax advantages or benefits will vary according to the individual's circumstances. The levels and bases of taxation may also change. If now or in the future, you have the option of joining an employer's occupational or contributing pension scheme you should consider joining or making contributions to it. Once in a pension your money is only accessible, in general, from age 55.