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HOW IT WORKS Firstly you need to invest. But before you do, here’s a quick run down of the choices on offer to you. And there are plenty of choices available with a SIPP. Some well deserved tax relief It’s no secret that tax efficiency is one of the biggest advantages of any kind of pension investment – and that goes for a SIPP too. The payments you make are boosted by up-front basic-rate tax relief from the government, meaning that every £8,000 you pay into your pension is immediately uplifted to £10,000. And if you’re a higher rate tax payer, you can claim back a further 20% from the taxman, meaning that adding £10,000 to your SIPP could cost as little as £6,000. Also any income and capital growth in a personal pension is completely free from any personal UK income and capital gains tax. It’s important to remember that tax relief may be altered and its value depends on your financial circumstances. More investment choice We’re all individuals. So it’s only right that we’re able to invest in a way that suits us. With a SIPP you’re in charge. You choose how much to invest in cash, bonds, shares, gilts, investment funds or even commercial property. And you can change your mind as often as you like. Whatever’s right for you at that time. Of course, the value of an investment depends on the value of the underlying assets and can go down as well as up. Keep it all in one place If keeping track of all your investments has become a little tricky, there’s a smart solution. Think about moving all your existing pensions into your SIPP. You’ll still be able to keep a diverse range of investments, but now you’ll be able to see everything in one place.
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Investing