The competition for self-invested personal pension (Sipp) business may be most intense between online investment platforms battling it out over charges and customer service, but research by interactive investor (ii) shows that the bulk of Sipp transfers are coming from pensions run by life insurance companies.
Drawdown is a flexible way to access your pension fund, where you decide how much income you want to take out every year. You can take regular withdrawals, the occasional lump sum or a mixture, or simply leave the investment fund to grow. It’s your choice, and you can change your mind as you go.
It’s now 30 years since Nigel Lawson fired the starting gun on the self-invested personal pension (Sipp) revolution. The then-chancellor’s 1989 Budget included a proposal to “make it easier for people in pension schemes to manage their own investments”, with the details following several months later and the first Sipp launching in March 1990.
In the fifth episode of our jargon-free video series on self-invested personal pensions, or Sipps, Money Observer editor Faith Glasgow runs through the Lifetime Allowance, which applies to any pension, not just Sipps.
In the video, Faith explains how the Lifetime Allowance is calculated and why public sector workers such as headteachers, senior civil servants or GPs are likely to be affected, while also outlining the tax charges applied when the Lifetime Allowance is breached.
In the fourth episode of our jargon-free video series on self-invested personal pensions, or Sipps, Money Observer editor Faith Glasgow explains the limit on the amount you can pay into a Sipp and get tax relief on each year.
The video also details why those who receive income of £210,000 or more will only be able to make the minimum £10,000 of contributions with tax relief each year.
Reaching age 55 was a rude awakening in terms of pension planning and provision. Since then I have been able to pay the maximum £40,000 annually into my self-invested personal pension and to use carryover from previous years. My plan is to pay in the maximum £40,000 during the first six months of the next financial year and then take early retirement in October 2020. I can access a small number of final salary schemes for both taxable and tax-free income, leaving the Sipp invested for a few years before taking it.
In the third episode of our jargon-free video series on self-invested personal pensions, or Sipps, Money Observer editor Faith Glasgow explains the “beauty of the tax wrapper”, but points out that there is no guarantee that the status quo will continue, so investors ought to reap the rewards while they can.
In the second instalment of our jargon-free video series on self-invested personal pensions, or Sipps, Money Observer editor Faith Glasgow compares the range of investments available in different kinds of Sipp with your choices in a personal or workplace pension.
For Money Observer articles on Sipps, please click here.
The subject of investment platform costs and charges featured prominently when the Financial Conduct Authority (FCA), the City regulator, published the outcome of its year-long study of the platform market in July. The FCA found that charges and the range of available investments on offer were the most important factors for DIY investors when comparing platforms, while lower charges were identified as the main motivation for investors switching platforms.
Savers will be pleased to hear the government has announced a crackdown on private pension cold calling.