SJP sipp

A Self-Invested Personal Pension, or SIPP, is a flexible type of pension that offers you access to a diverse range of investments, over and above a typical personal pension.

A SIPP is also a type of Defined Contribution (DC) based pension.

SIPPs will not be suitable for everybody and generally only those who are fairly experienced at actively managing their investment should consider this type of investment.

The levels and bases of taxation and reliefs from taxation can change at any time and are dependent on individual circumstances.

The value of a SIPP can fall as well as rise. You may get back less than the amount invested.

Why invest in a SIPP

SIPPs offer increased flexibility and control with the ability to invest in a wide range of assets.

This differentiates a SIPP from a workplace pension as it gives increased control and flexibility over to you. If this is what you are looking for, then speaking to a financial adviser is a good idea to understand what level of investment risk you are prepared to take, especially if considering different assets to invest in.

How does a SIPP work?

A SIPP works in much the same way as a standard personal pension, in that it is used to build retirement wealth over time, and then after age 55 allows you to draw down on it, with 25% payable tax free.

There are many types of pensions available, and a SIPP provides a great deal of investment flexibility, however this may not be the right choice for everyone. Having a broad range of investment choices can bring complexity, and it’s a good idea to have an understanding of how different investments work.

And it's good to know that...

Tax relief on your SIPP contributions works in the same way as a personal pension.

You can access the benefits from the age of 55.

Personal pension or SIPP

What can a SIPP invest in

A SIPP allows you to invest in:

Funds

SIPPs will typically have many hundreds or even thousands of different investment funds and are also likely to have readymade portfolios for different saving purposes. 

Shares

SIPPs usually allow you to buy and hold shares alongside your other investments.

Bonds

These are listed and traded in a similar way to shares.

Investment trusts

These are similar to typical investment funds found in a pension, but are usually single company investments that are bought and held in a similar way to shares.

ETFs

These operate in a similar way to pension investment funds, but are often based on a particular commodity or market. 

Commercial property

You are able to invest into commercial property such as offices  and retail parks through specific investment funds designed for this. You are able to invest directly into commercial property, but this brings additional complexity and often necessitates specialised advice. 

How to set up a SIPP

If you have decided this is the right choice for you, speaking to a financial adviser is the next step.

Getting your investment goals right can be a complex process; a financial adviser is the best way of making sure all areas are covered.

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up.  You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

Frequently asked questions 

What is the difference between a SIPP and a personal pension?
Are the death benefits different with a SIPP?
What happens if the annual allowance is exceeded?
Do I receive tax relief on SIPP contributions?
Can I access my SIPP from 55?
How much can I pay in and receive tax relief?

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What next?

Learn more about budgeting and the benefits of long term saving, including understanding some of the risks, and what some of the differences are between saving into a pension and any other form of savings.

Learn more
SJP Approved 05/04/2024