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

Turn £6,000 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.

From April 2011, tax relief on pensions contributions will be restricted for those with incomes of £150,000 and over, and tapered down until it is 20 per cent.

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 each year. However, tax relief will only apply to the lower of your earnings and the annual allowance (£245,000 for the 2009/2010 tax-year). For example, if you earn £50,000 a year you can contribute up to £50,000 gross (£40,000 net) into your pension plans in the 2009/10 tax year.

Even if you have no earnings - perhaps you’re retired or not working - you can still contribute up to £3,600 (£2,880 excluding tax relief in 2009/2010 tax-year).

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 2009/10 is £1,750,000 and you have to pay tax on any excess over this amount.

We can arrange your SIPP/Personal Pension with any one of 3 fund supermarkets

We can arrange your fund based SIPP/Personal Pension (unit trusts and OEICs) through Cofunds, FundsNetwork and Skandia Investment Solutions. All three offer similar features:

• A choice of funds from all 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.

The fees and charges do vary a lot between the fund supermarkets. And whilst we’re happy to look into all the options for you, we think Skandia Investment Solutions Collective Retirement Account (CRA) is likely to be the best value option.

Why Skandia Investment Solutions (CRA) is probably the best value option

Until now we haven’t been able to offer a competitive fund based SIPP/Personal Pension. Partly because sharing renewal commission on pensions is a “grey area” with HM Revenue & Customs – and frankly there have been alternatives where you would have been better off investing direct. That’s changed and we can now offer a fund based Personal Pension where we can share renewal commission with you. The pension plan is the Skandia Investment Solutions Collective Retirement Account (CRA) and the features are as follows:

• You can invest in more than 900 funds from 67 leading fund managers like Artemis, Fidelity, Invesco Perpetual and Jupiter – the annual charges are exactly the same, as if you had invested directly with the fund management companies.
• 100% of your money is invested because there’s no initial charge – through CommShare – on any fund.
• There are no switch fees – through CommShare – and you can switch as often as you want.
• CommShare receives 0.25% p.a. of the value of your plan – but any renewal commission above this (renewal commission is typically 0.5% p.a. on equity funds) is paid into your plan’s cash account. This is how we share renewal commission with you. Importantly, it’s not paid to you in cash, but remains in your pension plan.
• There’s a £50 p.a. plan fee paid to Skandia Investment Solutions – but this also pays for an ISA Account, a Collective Investment Account and an Onshore Collective Investment Bond. The good news is that if you decide to use any of these, you won’t pay any initial charges or switch fees in these accounts either.
• You receive basic income tax relief on personal contributions immediately. For example, if you invest £80, a further £20 is invested for you. Skandia Investment Solutions claims this money back from HM Revenue & Customs. If you are a higher rate taxpayer you can claim any further tax relief through your self-assessment.
• Your employer can make contributions into your pension. You can even have multiple direct debits going into your pension, for example one from your bank account and one from your employer's bank account.
• You can transfer your existing pension(s) into the CRA to keep all your retirement savings in one place.
• When you reach retirement you can decide to take all your benefits at the same time, or take only some of the benefits, allowing you greater flexibility. There are charges for taking benefits.

Want to know more?

To request SIPP/Personal Pension brochures, Key Features and application forms, please go to our Brochure Request page and select any of the following. In fact, if you click one of the links below your brochure will already be selected for you.

• Skandia Investment Solutions CRA
• Cofunds L&G Portfolio Plus SIPP
• Fidelity FundsNetwork SIPP