How much will my SIPP pension pay in retirement?

SIPP pensions are popular with retirement savers who want to take control of their investments.

Most personal pensions limit the choice of investments to a short-list of funds looked after for the saver by a professional manager.

With a SIPP, the saver can opt for managed funds or take full control by choosing their own investments.

These can be funds, stocks and shares, bonds and many other options, such as exchange traded funds (ETF), currency and commodities.

Like other pensions, SIPP savings receive contribution top-up tax relief up to 45%, while the pot grows free of capital gains tax.

Drawing money from a SIPP

When the retirement saver reaches 55 years old, they can choose to leave the money invested or access their cash.

The fund pays a 25% tax-free lump sum, but other payments may be subject to income tax.

How much a saver can take depends on the value of their fund on the day the money is withdrawn.

Modern SIPP pensions are part of investment platforms which let the saver manage their funds online.

The value of the fund depends on the performance of the investments and does not provide any guaranteed income.

Few SIPPs offer benefits such as index linking, but most will allow the passing of unspent savings to beneficiaries if the retirement saver dies.

How to open a SIPP pension

Many providers offer SIPP pensions. The points to consider are how much fees and other charges are payable to the provider.

The charges can include a set-up cost, share dealing costs and annual management fees.

Funds can be transferred in from other pensions, but not the state pension or public or civil service schemes.

Contributions can be when you like – monthly or regular lump sums.

Like other personal pensions, SIPPs are subject to the lifetime allowance which limits fund size to £1 million. Annual contributions cannot exceed £40,000.

Pension rules do change now and then, so make sure speak with one of our advisors to get the latest information

We will take you through the process, informing you of all charges and making sure your investments fall inline with your attitude to risk

To find out more Contact us here using the form or call direct on +1 (917) 810 3149