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Five top tips for your SIPP

  • Five Top Tips from the Pensions Experts

    Five experts share their top tips when it come to SIPPs and pensions

  • You can ignore retirement, but retirement won’t ignore you

    Even 61% of retired, confident investors say they want more income
    (Schroders Global Investor Study 2018)

We’ve asked five experts from the world of SIPPs and pensions for their top tips on how you can make the most out of your SIPP and retirement investments.

1. Increase your contributions in line with your earnings

Andy Leggett, Head of SIPP Business Development, Barnett Waddingham

“Every great journey starts with a single footstep” notes a Chinese proverb. It applies to pensions. The destination – the sum you need to support yourself in suitable comfort, every year, for the rest of your life – can seem impossibly far off. Sometimes we just need to start.

Also implicit in the proverb is continuing to take steps. Prices, pay and aspirations all tend to rise over time: our pension contributions probably need to, too. A great time to increase your contributions is when you get a pay rise because you can avoid a fall in take-home pay. Commit now so that you follow through when the time comes. Ask your pension provider what you need to do and write a reminder in your calendars. You can do the same with bonuses if applicable.

Taking regulated financial advice is sensible. So is a positive mind-set: one day you are going to spend this money on yourself!

2. Compare all costs, not only the headline costs

Kyle Dale, Business Development Manager, @SIPP

Always shop around and compare costs, not only the headline costs but the additional extras for your chosen investment route. Specifically, if comparing fund value percentage based charges with flat fee charges. For higher value pots this can be a substantial difference.

Another example may be a property purchase within a pension, being a specialist area this will hold its own separate charges. Be sure you get the full options available within a SIPP (lending, property manager options). 
Don’t let costs drag down your investment return!

Make the most of any unused annual allowances, consider carrying forward unused allowances from previous tax years too. Alongside reclaiming your higher or additional rate tax relief.

3. Diversify and stay in the know

Steve Haysom, Director, DIY Investor

The beauty of a SIPP is its ability to house an array of investments and doesn’t tie investors to a particular asset class, as experienced in a more traditional company pension scheme arrangement. Investors utilising SIPPs are able to build a diverse portfolio in pursuit of their financial goals, with levels of risk they can tolerate; because they are in complete control, the investor can adjust their mix of assets as their circumstances and objectives evolve.

SIPPs are a portable and almost infinitely flexible investment wrapper entirely suited to the changing employment market and the inevitable shift from dependence on the state to financial self-reliance.

Starting early allows investors to take maximum advantage of the ‘miracle’ of compound interest and, suitably educated, we believe that an increasing number of people could choose the freedom and control afforded by a SIPP. Investors with SIPPs can benefit from utilising resources such as DIY Investor and Selftrade’s Morningstar data, where they can cultivate their market knowledge and invest with confidence.

4. Take advantage of a 25% uplift

Ian Linden, Technical Manager, Pensions, James Hay

Personal contributions to a pension for people under the age of 75 attract tax relief at the individual’s marginal rate of tax. Thus for every £8 a basic rate taxpayer pays, this is increased through tax relief to £10, a 25% increase on the amount paid.

For individuals who are higher or additional rate tax payers the additional relief is available through their tax return. Even if the individual is a non-taxpayer they are entitled to relief on net contributions up to £2,880. Where else today can you see an immediate 25% return?

 

 

5. Take benefits from your SIPP wisely

Patrick Vaughn, COO, Gaudi

You can take benefits from your SIPP in a variety of ways. Whilst you can still opt to use your fund to buy an income for life from an insurance company (an annuity), you no longer have to do so. Once you reach 55 you can take up to 25% of your fund as a tax-free lump sum and leave the balance invested for as long as you like. You can even take taxable payments as and when you need – this is known as “Flexi-Access Drawdown”.

You don’t have to take your full allowance all at once, which allows you to take further tax-free lump sums that should hopefully benefit from future investment growth. Alternatively, you can take one-off payments made up of both a tax-free amount and a taxable element – this is known by the catchy title of “Uncrystallised Funds Pension Lump Sum” (UFPLS)

Four reasons why investing within a SIPP can help your retirement financial planning

  • A great way to boost your retirement income

    You can have a SIPP as well as your work and/or state pension to boost your income in retirement.

  • Flexible investing

    Choose which asset class or sector you want to invest in. Alternatively, get a fund manager to do it for you. 


  • Get a boost from the government

    Tax payers will get a contribution from the government up to a capped amount.

  • Manage your pension online

    Once your SIPP dealing account is opened and funded, you can start investing online from as little as £50 per month.

  • A great way to boost your retirement income

    You can have a SIPP as well as your work and/or state pension to boost your income in retirement.

  • Flexible investing

    Choose which asset class or sector you want to invest in. Alternatively, get a fund manager to do it for you. 


  • Get a boost from the government

    Tax payers will get a contribution from the government up to a capped amount.

  • Manage your pension online

    Once your SIPP dealing account is opened and funded, you can start investing online from as little as £50 per month.

Open a SIPP or top up today

I’ve still got questions!

We’re on hand to help at our Customer Experience Centre on 0345 0700 720