Capital Ideas is a trading style of Financial Horizons Ltd. Financial Horizons Ltd is an appointed representative of Burns-Anderson Ltd, 27 Great George St, Bristol BS1 5QT, which is authorised and regulated by the Financial Services Authority. Burns-Anderson Ltd is entered on the FSA register (www.fsa.gov.uk/register) under reference 126191. The information and content of this website is intended for UK consumers only and is subject to the UK regulatory regime. The FSA do not regulate some forms of mortgages or tax planning services.
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Self invested personal pension plans are personal pensions that also provide the facility to invest in a wider range of assets.
SIPP’s can be particularly useful for small business owners, since it is possible, within limits, to invest in the employer's business premises. The scheme can also borrow money to help to buy the premises.
There is no official list of permitted investments, but the following investments would currently be permitted:
- Unit trusts and other collective investments
- Futures and options
- Stocks and shares
- Fixed interest securities including gilt-edged stock
- Traded endowment policies
- Currency
Although these investments may be permissible, many SIPP providers restrict the investments that they will allow.
The tax rules provide for stringent penalties if a fund invests in 'taxable property'. Residential property generally falls in this category, as do most assets that are capable of personal benefit (works of art, fine wines etc).
The level of charges for SIPP’s is usually higher than for Personal Pensions and Stakeholder Pensions Also, there can be significant additional charges for certain investments, for example commercial property.
When you retire you are able to take 25% of the accumulated fund in cash, currently tax-free. The remainder of the fund must be used to create retirement income, which will be taxed as earned income.
When you take income from your pension you may need to decide whether to provide that all or part of it continues for a widow/widower or dependent child after your death, and whether to provide that the pension income will increase each year.
If you die before retiring, the fund can normally be inherited by those left behind.
Contact us for further advice on pension issues, and help in choosing a pension that is right for you.
For further information on general pension planning issues, see Pensions
Note: Many of the pension investments discussed can fall in value as well as rise, and you are not guaranteed to get back the full amount that you invested. Some investments can be very volatile, making it possible that you could lose your entire investment. Additionally, property investment may be difficult to sell at certain times, which could result in you needing to delay retirement.