We all know that we should be thinking about the future and planning for the day when we no longer have a regular income from a full-time job or business. And most of us have probably tip-toed around the idea of getting a pension at some point, or may even have gotten as far as talking to a financial advisor about the different options available to us. If you’re the kind of person who likes to do a little research into matters of finance then you may have come across the term SIPP and wondered to yourself ‘what is a SIPP pension?’.
SIPP stands for self invested personal pension and is a type of personal pension that gives you a lot more control and flexibility over your investment portfolio. With a more conventional pension plan you pay a pension company to invest your money in a portfolio for you. The company’s fund managers have control over where your money goes and the choice of funds that they invest in is usually quite limited. This is a good option for someone who really knows nothing about the stock market, is quite risk averse, and would prefer to just leave their money where it is and not hear too much about what’s happening to it.
On the other hand if you would prefer to have more control over your money and your investments, then a Sippdeal self-investment pension is the ideal option for you. A lot of SIPP companies like Sippdeal allow you to control your investments online, which means you can buy and sell investments from your desk or home office. The list of funds you can invest in is much more comprehensive than that of a standard pension, and even includes commercial property.
Another advantage of a SIPP is that you can choose to invest in funds that are aligned with your social policies or personal interests. So, for example if you have a real interest in green technologies or renewable energies you could choose to invest in a ‘green’ portfolio of companies focused on developing the energy sources of the future. So, not only are you (hopefully) banking a sound financial future for you and your family, your investments are also making a positive contribution to important new developments that could benefit your children and grandchildren.
Like all pensions, an SIPP is free from capital gains tax and it offers up to 50% tax relief on contributions. Set up charges will vary from company to company so it’s a good idea to do some research and find out which ones are the most competitive before you make a decision.