What Are The Benefits Of A SIPP?

If you’re in the process of considering pension options, there’s a very good chance you’ve been looking at opening a SIPP (Self Invested Personal Pension). You’ve probably heard that there’s benefits to be had from a SIPP as opposed to other options, however are you aware as to what they are? To try and help you consider all options, we’ve put together a brief look at the benefits of a SIPP to enable you to make the best and most informed decision when it comes to taking out a pension.

SIPP Gives Flexibility & Controlmoney retirement

When it comes to a SIPP, you’re in full control as to how your money is invested and there’s a significant number of options available to you, all of which come with complete flexibility. You make the decisions as to what your money is invested in and who manages these investments for you and it’s this level of control which you receive when compared with other types of pension which has made SIPP’s an increasingly popular option in recent years.

When it comes to the ways which you can invest within your SIPP, there’s a significant number of options available, with investment opportunities ranging from bank accounts (this is always the starting point as all cash must first come into the SIPP’s own account before being channelled into other investments), savings bonds and stocks and shares through to gold bullion, investment platforms, land and even commercial property.

With a SIPP, you call the shots and are in full control over every aspect of your pension, unlike personal and stakeholder pensions where the pension provider makes the decisions on how and where investments are made and simply send you an annual statement on your fund’s performance.

Transfer Multiple Pensions Into A SIPP

Many people accumulate numerous workplace pensions throughout their adult life and, as such, find themselves with more than one pension. A SIPP can offer you a fantastic option to combine multiple pensions into one and invest as you wish, as per the other benefits outlined above.

Tax Benefits

Perhaps one of the more attractive benefits of a SIPP to the majority of investors is the tax benefits which are associated with them. As an example, as a basic rate tax payer, an investment of £8,000 in a SIPP would automatically become £10,000 due to the government adding £2,000 (20%) tax relief. Such tax benefits can significantly increase your pension pot and if you’re a higher rate tax payer, you’ll receive additional relief, however it won’t be automatically added to your SIPP.

Transparent and Competitive Fees

When compared with other types of pension, SIPP’s offer incredibly transparent and competitive fees, giving you the confidence that more of your money is going into your pension pot. No one wants to be paying over the odds on fee’s and with the like’s of Liberty SIPP’s pension calculator, you can clearly see what you’ll be paying and how much you could save when compared to other options.

Increased Level Of Service

When you take out a SIPP, you’re going to be dealing with a provider who is able to offer a much greater level of personalised service than the providers of personal or stakeholder pensions. You’ll almost certainly have a dedicated team who look after you and give you the level of service which reassures you that, even though it’s invested into a pension, your money is still yours and that you’re in full control at all times.

All in all, SIPP’s offer a whole host of benefits when compared with other types of pension and at the time when you’re looking either at transferring other pensions or opening your first, they’re an option seriously worth considering.

Matthew Rankine is the technical sales and marketing manager at Liberty SIPP, using his finely tuned knowledge of pensions to drive the company forward. Matthew has a genuine passion for pensions and is constantly trawling through the registered pension scheme manual looking for new bits to excite himself.

Photo Credit: 401kcalculator.org

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