The Attractions of a Self-invested Pension
One of the reasons for searching out the services of an independent financial adviser is that pension matters are awash with esoteric terms, labels and descriptions. The self-invested pension - or Self-invested Personal Pension (Sipp) as you’ll often see it called - is a good case in point. The underlying principle is relatively straight forward and attractive, but to make the most of the opportunities it represents, it really is essential to take expert advice especially if you are considering transferring to a self-invested pension from an existing pension scheme.
What it ise
A self-invested pension shares the same basic features as any personal pension plan regarding such things as eligibility, contributions and tax relief. Instead of pension contributions being paid into an insurance policy investment however, the self-invested pension remains very much in the hands of the pension holder, even when it comes to making the investment decisions. For example, the holder can choose to invest in anything from individual shares to unit trusts, gilts, traded endowment policies, residential or commercial property and even investments in art or vintage wines.
In other words, it is the pension holder (or his financial adviser) who can make the investment decisions, rather than being tied into the insurance company’s investment portfolio in a conventional personal pension plan. If the self-invested investments are not performing as expected, therefore, it is a relatively straight forward matter of switching to higher-performing investments.
Provided you earn more than
