A self-invested personal pension (SIPP) is one way to set up a private pension fund that will hopefully provide a pension income on retirement.

The advantage of a SIPP is that the choice of investments that can be held within the SIPP wrapper is vast. You can also run them alongside an existing scheme. Under current rules the SIPP provides income tax relief at your marginal rate (so a higher rate tax payer in effect pays 60p to invest £1) and the resulting fund can be accessed from the age of 55 with up to 25% of it taken as a tax free lump sum.

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