Why choose a SIPP to invest in pensions?

Why consider a SIPP instead of a stakeholder or insured pension?

For many people, the principal reasons are:

• Investment Choice

• Personal Tailoring

• Control

Investment Choice

Traditional insured and stakeholder pension plans generally limit your investment options to the range of funds managed by the company running the pension. This has a number of implications as are generally locked into the funds of that particular provider. They might seem to be good funds to you now, but what about in 5 years’ time? Or 25 years’ time?

If the funds underperform, do you want the inconvenience of transferring your plan to another provider? By contrast, a SIPP allows you access to a wide range of investments that you can change easily.

Traditional pensions usually limit your choice to insurance-based funds, barring your from investing in direct equities, investment trusts or other types of investments. A SIPP, on the other hand, does not limit your options: you can choose how you want to invest subject to HMRC rules.

Personal Tailoring

Because traditional and stakeholder plans are 'off the shelf' products, there is limited scope to tailor the plan to your particular needs. For example, you might mentally 'earmark' part of the fund for a particular purpose - to accumulate to take tax free cash to pay off a mortgage, for example. A SIPP allows you to take quite different investment approaches for each part of your fund.

You might want to invest your fund in particular ways (especially if you are in income drawdown), so that most of the fund is in 'protected growth' stocks, for example. A SIPP allows you to do this.

If you are in business, you might want to buy your new business premises through your pension fund, so that you benefit from any capital growth and rental income. With a SIPP, you can, or you might be environmentally conscious and want to invest in an area of forestry - with a SIPP, you can. 

Control

Above all, a SIPP puts you in control. 

You decide how, when and where to invest subject to Her Majesty's Revenue & Customs rules and you can control the benefits: SIPPs offer unrivalled flexibility, particularly for clients in income drawdown. If you want to vest just part of your fund for drawdown, you can. If you want to invest that part of the fund in a particular way, you can. A SIPP puts you in control.

» Register your interest in a SIPP

Who to contact

If you have a query or want more information, share dealing is administered by Hoodless Brennan as Account Manager and any additional pension investment outside equity dealing or administration for the pension is the responsibility of Capita SIP Services as Plan Administrator.

» Learn About SIPPs

» Contact Us - find out who to contact if you have a query.