What is a Sipp - Sipps Pension Guide

What are SIPPS Pensions

A Sipps Pension is a Self Invested Personal Pension Scheme that provides you with the option of choosing when, where and how you invest the assets of your pension fund.

Sipps Pensions have been around for a long time, since 1989 but changes are taking place in April 2006 which will increase the number of investment options available and make SIPPs pensions an attractive proposition for many UK Personal Pension Plan holders.

With a Sipps Pension you are free to invest in:

 " Cash Deposits

 " Stocks and Shares

" Unit Trust

" Investment Trusts

" Managed Funds

" Commercial land and property, assisted by bank borrowing if required

" From 6th April  Residential Property

In some cases your SIPP pension will also be able to invest in luxury investments and collections such as Art, Fine Wine and Vintage Cars.

Along with increased investment choice the upper limit for the amount an individual can invest will increase to 100% of their income with a maximum ceiling of £215,000.

The new scheme will also allow UK Tax Residents to pay into both an Employers Pension Scheme and a Sipps Pension. A Sipp Pension will also attract the same tax advantages as a Personal Pension Plan.

Any contributions that you make to a Sipps Pension will receive tax relief of between 22% and 40% depending on what the current tax rates are and what personal tax band you are in.

When you retire a Sipps Pension will provide you with similar options to traditional Pension schemes: You will be able to take a tax free lump sum of up to 25% and use the remainder for income generation.