| Taking an Income |
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GETTING HOLD OF YOUR MONEY Unlike conventional pensions, your SIPP is a lot more flexible when it comes to getting hold of your well earned cash (which is only right, seeing as you put it there). You can take a tax-free lump sum, draw an income from it without giving up work and even pass on your savings to a family member in the event of death. Once you’ve reached 50 (55 from 2010) you can take a tax-free lump sum and an income. Take a tax-free lump sum Having dreams and lifelong ambitions is one thing. Being in a position to realise them is another. A SIPP has features that can help you do just that. Like traditional pensions, it lets you take up to 25% of your investments as a lump sum without paying a penny in tax. But unlike traditional pensions, you’re under no obligation to take an income after you take a tax-free lump sum. It’s your choice. So you can live for the moment and take opportunities when they arise. So whatever you dream of – business venture, bolthole in the country or relocation – your SIPP can help make it possible. Take an income whenever you need it Unlike traditional pensions, you can take an income from your SIPP from age 50 onwards (55 from 2010), even while you’re still working. So, if you want to take a breather from work without your quality of life changing. Take a sabbatical. Adapt to an unexpected change of circumstances. Or just take the really sunny days off. With your SIPP you can – providing you have saved enough and your circumstances allow you to. Please note that any income is taxed like a normal salary. Getting hold of your money Gone are the days when death meant the loss of your pension fund. With your SIPP the value of the fund can be passed on to your dependents in the event of your death. Not back to the pension provider. Alternatively, a lump sum can be paid to a dependent – this is subject to a tax charge of 35%. It means your money stays active for longer and your family gets the full benefit of your savings. Exactly the way it should be.
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Taking an Income