What is a SIPP?

  • A SIPP is a Self Invested Personal Pension
  • You choose where your pension funds are invested
    • There is much more investment choice than with a Personal Pension
  • You have considerable flexibility as to when you retire
    • You can take out Tax Free Cash when you retire without buying an annuity
    • Income Drawdown gives you the flexibility of more income options in retirement
    • Funds can be left to your children when you die

Investments Allowed

  • The Brooklands SIPP generally accepts all Inland Revenue non-taxable investments
    • This is all investments allowed by Personal Pensions plus:
      • Equities, Unit Trusts and similar investments
      • Property Funds
      • Commercial Property and Land in the UK
      • Apartment Hotel Rooms
      • Commercial Property
      • Property purchases can be in the UK & Abroad

Protected Rights from Contracting Out

  • The Brooklands SIPP can accept the transfer in of Protected Rights
    • These funds can be used for self investment

The Advantages of having a SIPP

  • SIPPs give you vastly more flexibility than personal pensions
  • SIPPs enable you to take control of your pensions funds
  • You don’t have insurance companies dictating to you where your money is invested
  • The Brooklands SIPP has fixed, and generally considered low, charges
  • Assets within your SIPP can benefit from significant IHT mitigation before age 75
  • You choose whether or not to buy an annuity
  • SIPPs need not die with you; your pension funds can go to your children
  • You can transfer existing pensions into your SIPP
  • You usually obtain full tax relief, at your highest rate, when you pay into a SIPP

Funding your SIPP

  • Transfer existing pensions into your SIPP
    • Pensions we accept as transfer are:
      • Personal and Group Personal Pensions
      • Stakeholder and Group Stakeholder
      • FSAVCs, RACs, RAPs
      • S226 Buyout Bonds, Executive Pensions and Group Money Purchase may possibly be allowed
    • Moving existing pensions to a SIPP can save you money and hassle
      • It enables you to draw an income when you retire and not buy an annuity
      • It means your children can usually inherit your pension funds when you die
  • Transfer old SIPPs into a new SIPP
    • If you already have a SIPP, moving it may reduce charges and increase investment flexibility

Retiring: Income Drawdown & Annuities

  • Most people buy annuities when they retire
    • Annuities give a guaranteed and predetermined income for life
    • Annuities are very inflexible, and poor value for money if you die early
    • However, they can be good value for money if you live to an old age
    • The annuity dies with you, or dies with your spouse
    • Your children get nothing from your pension when you die
  • However, SIPPs allow you greater flexibility in retirement
    • You choose how you take income when you retire
    • Annuities need not be purchased; you can choose Income Drawdown
    • You can retire, take tax free cash, and draw an income from your pension
    • If you wish, you may be able to draw a zero income to leave more in your pension
    • On your death the remaining pension funds can usually go to your children
  • When you reach 50 (if it is before April 2010) or 55, 25% tax-free cash can be taken from your SIPP
    • An annuity does not have to be purchased at the time
    • You can delay buying an annuity
    • You can take no income from the pension fund each year, if you wish
    • So you can take tax free cash without drawing an income
    • Or you can draw quite a high income if you want to
    • You can decide each year how much income you take within limits
  • Pension funds can be left to family in the event of death.
    • Pensions do not need to ‘die’ when the pensioner does.
    • If you die before 75 the pension funds can pass to your nominated beneficiaries
    • A tax charge of only 35% would be payable on death
  • If you stay with old pension funds you will probably be forced to buy an annuity
  • Pensions can now offer the ability to take 25% tax free cash from age 50 or 55
    • So, even funds in AVCs and FSAVCs can provide tax free cash
    • But many existing pension schemes have not been changed to allow this to happen
    • Funds accrued in company pension schemes pre ‘A’ Day may possibly allow more than this
    • It is vital to protect extra tax free cash entitlements where they exist
    • Equally, some pensions currently allow much less than 25% tax free cash

Notes for IFAs

  • SIPPs are provided by Brooklands Trustees Ltd which is a self invested pension’s administration company and is authorised and regulated by the Financial Services Authority (FSA).
  • We provide a flexible investment choice within HM Revenue and Customs (HMRC) Regulations with minimal ‘in house’ rules.
  • As a pension’s company we lead the way for overseas property and are willing to consider any location for commercial (HMRC non-taxable) property.
  • We offer a bespoke personal service for introducers which includes white labelling and assisting with structuring new innovative pensions investments.
  • Full marketing and technical data will be sent to you when you enquire.