SIPPs are a flexible way of saving for your retirement if you are a UK tax payer. The scheme member has the power to decide when, where and how the assets of their pension fund are invested. Although they've been around since 1989, it wasn't until certain changes were made in April 2006 ('A Day') that they became more accessible to more people and now everything from individual shares and company bonds to cash and commercial property can be held in a SIPP.
The tax advantages are very appealing with contributions to SIPPs treated identically to contributions to personal pensions. Individual contributions automatically receive basic rate tax relief whilst higher rate taxpayers can claim additional relief through heir tax returns and there is no capital gains tax on growth.
With pre-development land qualifying as 'commercial' property, £20,000 of land purchased through Landcorp International and held in a SIPP could cost you as little as £12,000 thanks to tax relief
You can also contribute to your SIPP by transferring money from your other
pensions. In fact, this has proved an extremely popular method, because it can
greatly increase the performance
of your pension assets.
As from 1 October 2008 6 million people with protected pension rights pension funds averaging £16,500 can at last move their money into a self-invested personal pension. If you are interested in finding out more, click here to read our article.
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The performance of your pension fund is crucial to realising your retirement dreams, but some pension funds are not living up to their side of the bargain.
New research from Hargreaves Lansdown says that £55 billion of pension funds have not delivered the investment returns they should. These 'Old Bangers' have guzzled huge sums in pension contributions without giving much mileage in return. Read more..