SIPPs

Self-Investment Pension Plans, or SIPPs, are the latest buzz product in the world of pensions. Although they aren’t a new product per say, the recent and sudden rise in their popularity has got everyone talking about them. In laymen’s terms, saving for when you retire using a SIPPs plan gives you a much greater flexibility and control over your savings and investments.

As opposed to a normal pension plan which holds your money in a set plan or equity and relies mainly on interest to boost the fund, you get to choose exactly where you want to invest your money. This also ensures that your investments are tailored to your needs instead of your money being placed in markets and equities selected by others.

Anyone who is over the age of 18 and has been a UK resident for at least 5 years is eligible for a SIPP. The flexibility appeals to those who are comfortable about making their own investments, and taking control of their destiny so to speak. It is for this reason that SIPPS had previously been so popular in the trade, with the likes of pension personnel, investment bankers and the like choosing this method of saving for their retirement.

If you reasonably savvy when it comes to investments and are looking to build up your pension fund using a flexible and tax efficient method, a SIPP could be a perfect choice. As long as you accept that projected growth isn’t guaranteed and you are prepared to tie up your money until you are at least 55, as well as bearing in mind that tax treatments many also change over time.

The flexibility is the big selling point of SIPPs, and many enjoy the fact that are given the opportunity to explore a wider range of investment opportunities, and also those who have been in business much prefer to have sole control over their investments rather than leaving them to somebody else to sort out on their behalf.

Now as great as they seem, like every product in this market, a SIPPs plan won’t suit everybody. Those who want unrestricted access to their money need to look elsewhere, as do those who want to invest directly in such equities that aren’t currently covered by SIPPs, such as commercial properties. Take time to weigh up the pros and cons before opting for a SIPPs plan, and make the correct and informed choices regarding your pension.