Stocks and Shares Sipps - Sipps Pension Guide

Stocks and Shares Sipp

If you have an interest in stocks and shares or would like to start building a share portfolio then a SIPPS pension could be the ideal vehicle for you.

The beauty of buying stocks and shares through a SIPPS pension is that any dividends you receive or gains you make are free from tax. You also get tax relief on the money that you invest in the Stocks and Shares through you SIPP Pension, which if you are a higher rate taxpayer, means you share purchases are 40% cheaper.

Below is a quick guide about how stocks and shares work. Before you invest any part of your pension fund into stocks and shares please seek Professional Advice. The stock market is simply a market where the shares of companies stocks are purchased and sold. Companies sell shares within their company because the need to raise finance, these shares can be brought and sold for any price that a buyer and seller agree but the stock market provides the price at which the shares are currently selling for.

 Your investment in stocks and shares grows in two ways: the first way is through an annual dividend, which in basic terms is a share of the profits that the company makes each year. Your share of the profits (or dividend) is defined by the percentage of the shares that you own in the company. The second way that your investment grows or shrinks is through the value of your shareholding. T

he value of your shares changes as the companys performance and perceived performance for the future change. For example if a company has just signed a large contract for a number of years then the value of the shares may increase as demand from people wishing to buy part of that company goes up.

The smart way to invest in the stock market with your Sipps Pension is to invest for the long term and only with the money you can afford to loose. Our findings lead us into thinking that you should allocate only a part of your Sipps Pension Plan for investment in stocks and shares.