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Gain tax relief with a SIPP
Once you have a private pension, you are eligible for 20% tax relief
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How does it work?
To accumulate £100 in your pension pot, you pay in £80 and the government will pay £20 in tax relief
What tax benefits can you expect from a SIPP?
SIPPs share the significant tax benefits common to other private pensions; of course, HM Revenue & Customs can make changes but at present, here’s what you can expect as a UK tax payer:
- For most of the UK, everyone starts by paying the basic tax rate of 20% (rates vary in Scotland).
- Once you have a private pension, you are also eligible for 20% tax relief. So, to accumulate £100 in your pension pot, you pay in £80 and the government will pay £20 in tax relief.
- For people who also pay the higher rate, you’ll usually be able to claim back even more with your tax return.
Tax and SIPPs
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Basic rate
If you are paying the basic rate and have £10,000 to invest in your SIPP, the government tax relief of 20% means it will rise by £2,500, so you end up with £12,500 in your SIPP.
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Higher rate
If you are a taxpayer on a 40% tax-rate and have £10,000 to invest, the government will still provide 20% tax-relief, adding £2,500.
Then, you can claim back an additional 20% via your Self-Assessment tax return, which would take the total tax relief up to £5,000, so you will have personally contributed £10,000 to have £15,000 in your SIPP.
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WHY EQI?
The EQi SIPP
Enjoy more control and access to a wider range of investment options with an EQi SIPP
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EQi explains
Drawdown
Learn about the different methods of drawdown
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EQi explains
SIPPs explained
Learn more about how SIPPs let you take an active part in investing for your future
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Why EQi?
EQi SIPP fees
Fees matter because, like interest rates, costs compound