SIPPS explained

If you don’t need a secure, regular income then you can continue to manage your pension fund and draw a variable income (within certain limits) directly from the SIPP. You will continue to make all investment decisions and the value of your SIPP will rise and fall depending on the performance of your investments.

If you wish to transfer a pension to your Halifax Share Dealing SIPP from which you have already started taking benefits, please complete the Transfer In Drawdown Benefit Form (PDF). This form should be completed in addition to your SIPP application (for new customers only) and the relevant transfer-in form(s). If you are transferring more than one pension in drawdown please complete one form for each transfer.

Charges will apply to your SIPP where you designate some or all of your SIPP to drawdown.

You can take a one-off payment from your pension or a series of lump sums, keeping the remainder of your pension invested. The first 25% is tax-free, with the remainder subject to tax at your usual rate of income tax.

An annuity converts your pension fund into a regular, secure income payable for the rest of your life. Choosing an annuity is an important decision to get right as, once you’ve signed up, it can’t be stopped or changed.

For more information about your options, read our Benefits Guide (PDF).

You can transfer your pension to us by completing our application pack (which includes a transfer form).

1. Transfers usually take around 8 - 10 weeks.
2. Download our transfer form (PDF) if you already have a SIPP
   

Have you already started taking benefits from your SIPP? If yes, you’ll need to complete our Transfer In Drawdown Benefit Form (PDF) as well.

If you’d like to switch your pension to the Halifax there are a number of things you’ll need to consider before starting the transfer.

• Not all pensions are transferable - please contact your current provider first to find out if you’re able to transfer.
• Exit and transfer fees may apply with your existing pension provider.

You may lose out on potential pension benefits with your current provider if you choose to transfer out.

Costs vary between pension providers so it’s important to familiarise yourself with these differences. Additional charges apply for other services.

Transfers usually take around 6 – 8 weeks however timescales are largely dependent on how quickly your current provider responds to our requests. If we have any issues with the transfer we’ll be in touch so make sure we’ve got your up-to-date contact details.

We charge £60 per transferring pension up to a maximum of £300. Your existing provider may charge you transfer or closure fees so please keep this in mind when you're transferring.

As pension transfers can take several weeks to complete, there may be a period where you are unable to deal while the transfer is pending.

You should also check whether your current provider only allows transfers in the form of cash as you may suffer losses as a result of buying back the investments once the transfer has completed.

If you pay tax at a higher rate than basic tax rate you can claim any further tax relief to which you are entitled via self-assessment. If you are a Scottish or Welsh taxpayer and you pay tax at a rate higher than basic rate, you will be entitled to claim further tax relief at that higher rate. If you pay tax at lower than the basic rate of tax you will still be entitled to receive tax relief at the basic rate.

By transferring benefits into your SIPP from another pension provider, you may give up the right to guarantees over the kind of benefits, the amount you will receive and the level of increases that will be applied to your pension in future. Your existing pension provider may apply a penalty, or other reduction in the value of your benefits, if it is transferred. There is no guarantee that you will be able to match the benefits that you give up by transferring into a SIPP.

If you are in any doubt about the benefit of transferring, we recommend that you take advice from a suitably qualified, professional adviser before arranging the transfer.

Your benefits will be affected by the level of contributions paid to your SIPP now and in the future. You may benefit less from investment growth if you delay the payment of contributions to your SIPP.

If you have a smaller SIPP, it’s important to be aware that administration fees may result in costs being disproportionate to the value of your SIPP.

Most experts will tell you not to keep all your eggs in one basket, this is good advice as it’ll help you to reduce your risk. You'll be able to deal in a range of investments each of which carries a different type and level of risk.

All investments involve a degree of risk. The value of the investments in your SIPP can fall as well as rise and you may not get back the full amount that you invested.

It's extremely important to fully research stocks using sites such as our Shares Centre which gives trading news and recent trade values/amounts. Whilst research is important, do remember that past performance is no guarantee of future results.

If you start to take benefits earlier than you originally intended, the level of the benefits you can take may be lower than expected and may not meet your needs in retirement.

Your SIPP may be subject to additional tax charges at the point you withdraw funds if your pension is valued at more than the Lifetime Allowance (the maximum amount you can build up in a SIPP without facing tax charges). If you take income withdrawals this may erode the capital value of your fund. If investment returns are poor and a high level of income is taken this will result in your SIPP falling in value and could result in a lower income than anticipated in the future.

If you choose an annuity to provide your benefits, the level of income you receive is based upon the average life expectancy of someone of your age. When fixing annuity rates, providers take into account the fact that some people will die earlier than expected, effectively subsidising those who live longer. Income withdrawals paid from the SIPP do not have the benefit of such a subsidy.

There is no guarantee that annuity rates will improve in the future. If you choose to purchase an annuity, the level of pension you receive when you purchase the annuity may be less or greater than the pension previously being paid under income withdrawal and/or the annuity you could have purchased previously.

Having considered these risks, if you have any doubts about the suitability of the Halifax Share Dealing SIPP or you need advice, you must seek advice from a suitably qualified professional adviser.

For more information about SIPPs, please read the Key Features Guide (PDF).