What Is an SIPP?
Ever considered taking an SIPP along? Worried that you might not have anything closer to your guaranteed risk? Will it do you any good?
Here’s a short guide to know if SIPP is quite right for you.
Traditional Pensions Vs. SIPP
The Self-Invested Personal Pension (SIPP) is a useful financial vehicle that allows you to get money from the government for your personal use. It allows you to keep a large range of assets of your choosing, unlike pensions where all of this is predefined.
Traditional pensions will limit the types of investments you could make. SIPPs allow you a wider choice. It also helps you decide which assets to go for.
Types Of Assets
SIPPs include funds, shares, bonds, cash and even commercial properties to grow your funds. All of these assets are tax-free because these are pensions. If you investments grow in value or produce income, you have no capital gains tax or income tax as long as you declare them to be inside the SIPP
The Government Gives You Money For It
The government gives you money in a way that your SIPP attracts debt relief. Depending on which tax rate you are accounted for in, you could have as much as a 45 per cent tax relief.
Investing Without Catch
What makes an SIPP particularly useful for many soon-to-be-retirees is that you could use your existing pension and move it into the SIPP. It would be impossible for anyone not to have any pensions. However, the risk comes from the expenses involved in taking out money.