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SIPP - Self-Invested Personal Pension

Financial Planning • SIPP

WHAT IS A SIPP? (Self-Invested Personal Pension)

A SIPP is a pension ‘wrapper’ that holds investments until you retire and begin to draw an income. It works similarly to a standard personal pension. The main difference is that with a SIPP, you typically have more flexibility when you choose what to invest in.

With standard personal pension schemes, your investments are managed within your chosen pooled fund. SIPPs give you the freedom to select and manage your assets. However, because this is a complex area, most people choose to have an authorised investment manager make their decisions.

  • Essential details of a SIPP

    • A SIPP is based in the UK; regardless of where you live, it is regulated by UK law.
    • A SIPP is available to you regardless of where you live.
    • Under current legislation, you can start drawing retirement benefits from age 55. You can do this even if you are still in employment.
    • Your benefits are flexible. You may draw as much or as little income as you like. You can also stop and start withdrawing whenever you wish.
    • Up to 25% of your funds can be withdrawn as a tax-free cash lump sum.
    • If needed, you can transfer your funds into a QROPS later on.
    • SIPPs are excellent for those who plan to retire in the UK. They are equally beneficial for those in a nation with a preferential double-taxation agreement with the UK.
    • SIPP investments grow free of capital gains tax or income taxes.

  • What Can You Invest Into Within Your SIPP?

    • Quoted UK and overseas stocks and shares
    • Unlisted shares
    • Collective investments (such as OEICs & unit trusts)
    • Investment trusts
    • Gilts
    • Exchange traded funds (ETFs)
    • Property & land (but not most residential property)
    • Insurance bonds

    Some SIPPs can also raise a mortgage against commercial property. The rent will go towards paying down the loan and the costs of running the property.

Learning Resources

How Can We Help You?

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Things To Consider About Sipps For Expats

A SIPP is a personal pension. You are not required to live in the UK to be able to invest in one. However, there are important considerations if you do not live in the UK and are thinking about using a SIPP:

  • Even though a SIPP is held in the UK, it is possible to have a multi-currency SIPP. This can significantly benefit expats as it helps mitigate currency fluctuations on contributions and withdrawals.
  • SIPPs abide by UK pension rules and, as such, are affected by any changes the UK Government makes to pension rules.
  • You will still be subject to UK income tax when drawing an income from your SIPP. If you no longer live in the UK, your income may also be subject to tax in your country of residence. Hence it is critical to understand the local tax rules and those in the UK.  You can then make an informed choice about how to draw an income from your SIPP.
  • Many expats will speak to a financial adviser while deciding on retirement plans. They will do this because it is a very complex and critical area. If you seek advice from an adviser in the UK, remember that they may not be fully aware of all the opportunities for expats.

Disadvantages & Risks

  • Investment Risk

    • You bear the responsibility for investment decisions, which can lead to potential losses if investments perform poorly.

  • Fees and Charges

    • SIPPs often come with various fees and charges, which can reduce the overall value of your pension fund.

  • Loss of Guarantees

    • Transferring may result in the loss of valuable guarantees, such as a guaranteed income in retirement, offered by some workplace pension schemes.

  • Complexity

    • Managing a SIPP can be complex, especially if you lack experience in investment decisions.

Our Transfer Process

  1. Contact us to organise a no-cost initial meeting with one of our advisers.
  2. Undertake an initial meeting with one of our advisers to summarise your options.
  3. Engage with Hoxton Capital Management, who will assess your current financial situation, taking into account any pensions you have, and will produce a Pensions Analysis Report.
  4. If a transfer is recommended, and you accept our recommendations, we will manage all aspects of the transfer for you.

What Are Your Pension Transfer Options

QNUPS

A Qualifying Non-UK Pension Scheme (QNUPS) is a form of overseas pension available to British citizens.

Learn More

QROPS

A qualifying recognised overseas pension scheme (QROPS) is an overseas pension scheme that meets specific requirements set by HMRC.

Learn More

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