SIPPs - take control of your pension with more choice and discounted charges

We arrange low cost commission-free fund based pensions with Cofunds and Fidelity FundsNetwork.

• We do not take any initial commission, so that 100% of your money is invested from outset.
• We only take an annual fee of 0.25%, which is deducted directly from the SIPP.
• 100% of renewal commission generated by your chosen fund(s) is rebated back into the SIPP (if it is possible to set up an ongoing fee). This is usually enough to offset our fee and reduce the annual management charges too.
• It may not always be possible to set up an annual fee and if this is the case we’ll either keep the first 0.25% of renewal commission or rebate 50% of renewal commission, usually 0.25% p.a.

Both fund based pensions offer similar features:

• A choice of funds from all of the best-known fund managers.
• No initial charges, saving you as much as £500 for every £10,000 you invest.
• Standard annual management charges on funds e.g. the same as ISAs and unit trusts/OEICs.
• Free switching between funds.
• Accept transfers from other personal pensions, including protected rights.

Compare the fund based pensions at a glance

	Cofunds SIPP	Fidelity SIPP	Skandia CRA
Fund companies	90	70	80
Funds	1,500	1,200	1,000
Establishment charge	£180	£116	£0
Annual administration charge	Based on total assets held on the Cofunds platform: £0 - £100,000 - £150 per year £100,000 - £150,000 - £100 per year. £150,000 - £200,000 - £50 per year More than £200,000 - £0. Special offer: fee waived for year one.	£280 per year Special offer: no administration charge for new SIPPs if the fund value is more than £150,000.	£68.50 per year
Transfer in fee	Usually £75. Special offer: waived until further notice.	Free	Free
Switching charge	Free	Free	Free
Minimum single contribution or transfer value	£5,000 gross	£10,000 gross	£3,600 gross
Minimum regular contribution	£100 gross per month	£300 gross per month or £3,000 gross per year	£99 gross per month

Turn £5,000 into as much as £10,000

The total amount invested in your pension is £10,000. If you are a higher rate taxpayer, the amount you pay, after tax relief is £8,000 minus £2,000 i.e., £6,000. If you are an additional rate taxpayer the amount you pay, after tax relief is £8,000 minus £3,000 i.e. £5,000.

Other tax benefits

• Your pension grows free from income tax and capital gains tax – although tax deducted from dividends can’t be reclaimed.
• 25% of the value of your pension fund can usually be taken as a tax-free lump sum when you retire. The remainder is used to provide you with a taxable income.
• If you die before taking your retirement benefits, you can normally pass the fund to your chosen beneficiaries free from inheritance tax. Depending on the circumstances, other tax charges may apply.

Pension and tax rules are subject to change. Tax reliefs depend on your personal circumstances.

How much you can invest in your pension

There’s no limit to the amount you can invest into a pension each year. However, tax relief will only apply to the lower of your earnings and the annual allowance (£50,000 for tax year 2012/13). For example, if you earn £50,000 a year, contributions of up to £50,000 gross will be eligible for tax relief.

If you have no earnings - perhaps you’re retired or not working - you can still contribute up to £3,600 gross p.a. (£2,880 excluding tax relief in 2012/13).

Your tax free pension funds are limited by the lifetime allowance. Basically, this is the total value of all of your pensions when you retire. The lifetime allowance for 2012/13 is £1,500,000. If your total pension funds are in excess of the lifetime allowance at retirement you will have to pay tax on the balance.

Here’s an idea:
Why not think about investing £2,880 in a pension for a child or grandchild. The government will add another £720, taking the total amount to £3,600. You can do this every year if you want and there’s plenty of time for the funds to grow because they’ll be locked away until retirement.