SIPP Q & A

Can anyone have a Self Invested Personal Pension (SIPP)?

Yes, any UK resident individual, including children, can make contributions to a SIPP.

What is the maximum contribution I can make into a SIPP?

The maximum SIPP contribution is either £3,600 or 100% of an individual's income, up to a maximum of £245,000 per annum (for 2009/10 tax year and £255,000 for 2010/11). It is possible to contribute more than the annual allowance in certain circumstances such as in the year of retirement or by changing input periods. We would strongly recommend that advice is sought. If you would like advice on this matter, please contact Tor Flonaes on 020 7337 0520.

Can I cash in my SIPP and use it to put a deposit down on a house?

The benefits of a SIPP can only be paid out from the age of 50 (55 from 2010) and the way these benefits are paid out are laid down in pensions legislation. If the fund is worth £100,000 the most which can be paid out as cash is £25,000 or 25%. The other £75,000 or 75% has to be used to generate a taxable income, either through the purchase of an annuity or through the use of a drawdown plan (Unsecured or Alternatively Secured pensions). It's worth noting that you can take out zero income from an Unsecured Pension from the age of 50-75.

What happens if I die? Does my pension form part of my taxable estate?

Usually on death the benefits are paid out to the individual(s) you have nominated at the outset. So it is for you to decide who the money should be paid to and this can be changed should circumstances change. Usually there is no Inheritance Tax to be paid on these monies.

Can I transfer my SIPP elsewhere if it underperforms?

Yes, you can transfer it to another pension provider and you will not lose the tax benefits of the SIPP. There are administration charges associated with this.

How do I review the investments within my SIPP?

Your personal Broker is available to discuss and review your investment portfolio including your pension arrangements.

What to do next

Read about the benefits and risks associated with a Self Invested Personal Pension (SIPP).

Pension Review Service: If you would like one of our qualified Brokers to review your current pension arrangements, please call us on 020 7337 0520.

Request our SIPP brochure: Read more about the Killik & Co SIPP by requesting our free SIPP brochure, electronically or by post.

SIPPs explained: For further information about SIPPs and your retirement options, please request your free copy of SIPPs explained.