A Self-Invested Personal Pension (SIPP) is a retirement account which lets you decide where to invest your money. It’s very similar to a standard personal pension in that you’ll receive tax relief on all money paid in and you don’t have to pay UK tax on any profit or dividends your investments make.
However, unlike a traditional pension, you choose exactly what to invest in which means you know where your money is and how much you’re paying for each investment. Our SIPP is provided by AJ Bell.
Please remember that the value of all investments can fall as well as rise, and you may get back less than you invest. If you’re not sure about investing, seek financial advice. Tax treatment depends on personal circumstances and may be subject to change.
Pensions are a long-term investment. The retirement benefits you receive from your pension account will depend on a number of factors including the value of your account when you decide to take your benefits which isn't guaranteed, and can go down as well as up. The value of your account could fall below the amount(s) paid in.
- Invest up to £40,000 per year.
- Pay no Capital Gains Tax or Income Tax on your pension investments.
- Receive between 20% and 45% tax relief on all money paid into your SIPP (depending on your tax band).
- At the age of 55 you can start taking an income from your SIPP, including a 25% tax-free lump sum.
- Receive credit interest on any cash balance of £1 or above held in the account. The SIPP follows the Bank of England Base Rate which is currently 0.75% interest (gross).
Why invest in a SIPP?
SIPPs are one of the most tax-efficient ways to save for retirement. A SIPP is a self-managed pension which means you can buy, sell and hold a range of your own investments such as shares, funds, Exchange Traded Funds (ETFs) and more. Just like any pension, a SIPP cannot be accessed until you are 55 - although in some instances (for example, ill health), it may be accessed sooner. You can benefit from up to 45% tax relief on all money paid in, and in most cases the money in your SIPP is free from inheritance tax.
- You will automatically receive 20% in basic rate relief paid to your SIPP.
- If you are a higher/additional rate tax payer you can then claim an additional 20% or 25% (depending on your tax rate) via your tax return.
- Even if you don’t pay tax, you can make contributions up to £3,600 a year including tax relief, so you would put in £2,880 and HM Revenue & Customs (HMRC) would add a further £720 directly into your SIPP.
|Basic rate taxpayer (20%)||Higher rate taxpayer (40%)||Additional rate taxpayer (45%)|
|Tax relief automatically received||£2,000||£2,000||£2,000|
|Tax relief claimed through annual tax return||N/A||£2,000||£2,500|
What charges do I pay?
Our charges are simple and competitive. You pay a quarterly charge for holding the SIPP and then pay a dealing commission each time you place a trade.
|Quarterly account charge (SIPP value of £50,000 or less)||£22.50|
|Quarterly account charge (SIPP value of more than £50,000)||£45|
|Real-time online trades
||£12.50 dealing commission per trade|
|Scheduled regular investments||£2 dealing commission per trade|
This table shows the dealing commission and account charges you'll pay as standard. If you invest in a fund you'll also pay an ongoing charge directly to the fund manager. You may also pay government taxes and levies depending on the investment you choose. For full details please read our Charges page.
Apply for a SIPP
Before you apply for an account, make sure you’ve reviewed and understand the:
- Risks of investing
We’re making some changes to our SIPP Service and Scheme Terms and Conditions. View our new Service Terms & Conditions and Scheme Terms & Conditions (effective from 24th February 2020).