Self-Invested Personal Pension
The Alltrust SIPP is a Self Invested Personal Pension that allows considerable flexibility in both investment options and retirement planning. Given the complexities associated with these types of pension scheme, we normally only deal with clients through their appointed Professional Financial Adviser rather than on a direct basis.
We offer two types of SIPP:
- The Alltrust SIPP, which is an individual arrangement.
- The Alltrust Group SIPP, which is a standalone SIPP designed for small groups of individuals. These groups would normally be family members or business partners.
A SIPP is a pension scheme and therefore a primary means of saving for retirement. Monies are put into the SIPP where they are invested in a variety of assets. At the time the individual is looking to retire, or draw on these benefits, (currently from age 55), the monies held within the SIPP are used to provide income in addition to a payment of tax free cash of up to 25% of the net value of the SIPP at the point of drawing benefits.
The individual who is a member of the SIPP is able to decide what investments to make. SIPPs allow for a considerable number of different types of asset to be held, and the member must choose where they wish to place their funds. This is usually in conjunction with a Professional Financial Adviser.
A SIPP can be funded by making contributions to it (which gives the individual tax relief at their marginal rate), or by transferring assets from existing registered pension arrangements into it.
A SIPP has considerable flexibility in relation to drawing retirement benefits. We have already mentioned the payment of a tax free cash sum and a regular income but the scheme also gives the individual member the ability to vary the income being received in terms of the amount drawn, and the frequency of payment. Provision can be made to pay spouses or partners, and other financial dependants and beneficiaries, some or all of the pension fund in the event of an individual’s death.
Broadly, the aims of a SIPP are as follows:
- A means to save for your retirement in a tax-efficient way, as your fund is usually free from income tax and capital gains tax;
- A broad range of investment options, restricted only by relevant legislation and good practice;
- A wide range of options at your retirement, including drawing income from your fund or purchasing an annuity;
- The provision of a product that is flexible in meeting your changing needs and personal circumstances both at, before and after retirement;
- To provide cash and income benefits to your financial dependants in the event of your death;
- The ability for you to make your own investment decisions, in conjunction with your appointed financial or investment adviser;
There is usually no commitment on your part to make any contributions, or to continue making contributions once you start. Contributions can usually be started or stopped at any point.
A SIPP is a long-term arrangement. Benefits can only be drawn from the SIPP in accordance with legislation that prevails at the time. Currently, benefits can generally only be drawn from age 55, unless you retire due to ill-health, or have a protected early retirement age.
Fees are chargeable in relation to the administration of the SIPP and are in addition to those of any investment or financial adviser. These fees are normally paid from the fund.
When you take pension income from the SIPP the level of income that you take is currently determined by HM Revenue & Custom limits. Income is also taxed under the PAYE scheme.