Self Invested Pension Plan

What is a Self Invested Pension Plan?

Self Invested Pension Plans are similar to Personal Pension Plans. They come under the same basic rules as far as contributions, tax relief and eligibility are concerned. Where they differ is what they can invest in, and who offers them.

In comparison to Personal Pension Plans, Self Invested Pension Plans, give you far greater investment freedom. You can invest in all sorts of things from shares and collective investments, such as unit trusts, to futures and options, bank deposits and commercial property.

Is it the right option for you?

The greatest investment choice is available via a Self Invested Pension Plan but this must be balanced against the slightly higher administrative burden and the underlying costs involved with the running of a Self Invested Pension Plan.

Self Invested Pension Plans were until recently only suitable for people with large pension funds, but while it's still true that the larger the fund, the greater the investment opportunities, the Self Invested Pension Plan market has become much more competitive, and the prohibitively high fees once charged by providers have fallen considerably. Some Self Invested Pension Plan providers now specifically structure their charges to appeal to investors holding a smaller fund.

What if you have an existing pension?

Throughout your working life you may have built up benefits in several company pension schemes or private pension of your own. If so, you may carry on paying into your private pension as well as taking out a personal pension plan or Self Invested Pension Plan. In some cases, you may be able to move the money that you've built up in other pension schemes into a lower cost Personal Pension Plan or a Self Invested Pension Plan.

Bear in mind that some pension schemes offer extremely attractive benefits upon retirement and thus transferring such pensions will not be in your interest.

If you would like us to look into your pension plans and provide you with advice on what benefits you may receive upon retirement and whether transferring to another provider would be benificial, please contact us.


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