Could a SIPP be the Perfect Pension Option for You?
Posted on: 24 April 2015 by Bryan Smith
If you’re considering your retirement options, here are just a few of the benefits they can deliver.
It’s always wise to plan for the future, but as we age it becomes not only useful, but also necessary. For those who fail to look ahead, all that’s guaranteed is a basic rate pension, a struggle to cover the household bills, and years of desperately waiting for your next pension payment to hit your bank account.
Yet given the chance to choose how our retirement will be, the majority of us would never settle for penury. We want golden years spent doing all of the things that we never had time for before: holidays in the sun, hobbies that we’ve always longed to pick up, going out with friends and family and dining in style.
Thankfully, it’s in your power to choose such a retirement for yourself, provided that you begin to look to the future here and now. One increasingly common way to secure all of those things you’re dreaming of is through self-invested personal pensions (SIPPs).
If you’re considering your retirement options, here are just a few of the benefits they can deliver:
One of the greatest benefits of choosing a SIPP over other pension options is their flexibility, on every score. SIPPs not only allow you to put your money into the investments that you choose, but they also give you the power to determine how much money you’ll have to retire on, and exactly how and when you’ll choose to spend it.
The flexibility offered by SIPPs carries the added advantage of giving you full control over your future. It is down to you to decide how to invest your funds, and it is your skill and instincts that will determine how much money you have to retire on.
However, the most sought after advantage when it comes to SIPPs is the tax benefits that they can deliver, foremost among them tax relief. For basic rate taxpayers, an additional 20 per cent is added to your account whenever you invest funds, meaning that if you save £8,000, the government will increase this to £10,000 for you. For higher and additional rate taxpayers, the tax relief is even more generous: 40 and 45 per cent respectively. You’ll also find that you’re savings are safe from both income and capital gains tax, and can be passed onto your heirs tax-free.
Could SIPPs offer the perfect pension option for you?