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SIPPs explained

A Self-Invested Personal Pension lets you take an active part in investing your funds for your future

  • EQI explains

    Drawdown

    Learn about the different methods of drawdown: annuities, lump sums and FLUMPs

  • EQi explains

    Self-employed?

    Less than a third of the self-employed contribute to a pension; could a SIPP be right for you?

  • EQi explains

    Tax and SIPPs

    SIPPs share the significant tax benefits common to other private pensions

What is a SIPP?

Making sure you have a decent income when you retire takes planning. So, what do SIPPs offer?

A SIPP stands for Self-Invested Personal Pension. They enjoy generous tax benefits, give you access to a wide range of investments when compared to traditional pensions, and any gains made are free from capital gains and income tax.

Yet this pension option may not suit everyone. Why?

Because a SIPP puts you in the driving seat. A SIPP is a pension ‘wrapper’ which allows you to hold investments and decide what to buy and sell. The investment decisions you make are your own and, as with other investments, the value of your funds can fall as well as rise.

Since their launch in 1989, over 1.4 million people in the UK have opened a SIPP. If you want to take control of your private pension and actively invest, a SIPP could be a good fit.

  • What do SIPPs offer?

    A SIPP stands for Self-Invested Personal Pension. They enjoy generous tax benefits, give you access to a wide range of investments when compared to traditional pensions, and any gains made are free from capital gains and income tax.

  • Is a SIPP right for you?

    • If you are happy to be an active investor
    • If you are comfortable making investment decisions
    • If you want to invest in a wider range of assets, such as trusts or individual shares
  • Who can open a SIPP?

    • You can open an EQi SIPP if you are resident in the UK.
    • You can pay in up to 100% of your earnings, up to the maximum annual allowance of £40,000.
    • If you are not working, you can still contribute up to £3,600 a year including tax relief. In practical terms, that means you can put in up to £2,880 annually and the government would add a further £720.

What types of pension are available?

At their most basic, pensions break down into state, company and private. Here’s a brief look at what they offer.

  • State pension

  • Employer pensions

  • Private pensions

Three reasons to consider a SIPP

  • REASON 1

    Tax

    SIPPs share the significant tax benefits common to other private pensions.

    The government automatically pays an extra 20% into your pension (the basic rate of tax). If you pay a higher rate of tax, you may be able to claim back up to 46% via a Self-Assessment tax return.

    • As a basic rate taxpayer, you invest £16,000
    • The government automatically adds £4,000
    • So, your SIPP will have a total investment of £20,000

    Plus, the money invested in your pension grows free of capital gains tax and income tax.

  • REASON 2

    Control

    Typically, investors have little or no choice in how their contributions are invested. A SIPP is different, as you are the manager of your own pension fund.

    A SIPP puts you in the driving seat, you decide which assets to buy, sell and hold.

    Plus, EQi is unique among leading DIY investment platforms in the UK so if you have an existing SIPP elsewhere or you wish to open a SIPP with EQi and have it administered by a provider other than Gaudi, we work with over 50 leading providers so you can manage your SIPP from your EQi account.

  • REASON 3

    Choice

    A SIPP gives you access to a wider range of investment options, which means you can diversify your portfolio and seek returns which can boost your retirement pot.

    To help you select funds for your retirement pot which meet your investment goals and your attitude to risk, we’ve partnered with Square Mile, the independent investment research business.

Investment options: Pension v SIPP

*Some funds may be available in certain pensions

SIPP FAQs

  • How much can I contribute into my SIPP?

  • Can I invest any unused allowance?

  • What if I earn more than £150,000 annually?

  • Can I invest after I retire?

  • How is the tax relief on my SIPP contributions reclaimed?

  • What happens to my SIPP fund should I die?

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