SIPP Investments

A simple intro to SIPPs "SIPP Investment" (sounds dull, but if you want to get the best from your pension - it’s fascinating, and, nowadays: vital!)

So, what exactly is a SIPP?

“SIPP” stands for “Self Invested Personal Pension” or , it’s the title of a pension scheme that gives you options on what you can do with that pension. Essentially, it means that you can choose when, where and how you invest the money that’s accumulated in your pension.

What are the advantages of a SIPP?

Let’s boil this down to the essentials. When you transfer your pension into a SIPP, you’re able to:

1  Unlock the value of the entire accumulated pot in your pension.

2  Take control of exactly how much you invest.

3  Choose where you invest for the returns you want at the risk level that

you’re comfortable with.

4  Choose when you move your investments to take maximum gains.

5  Gain access to potentially much greater returns, such as those available

from well chosen overseas property.

6  Borrow against the assets of your SIPP fund, which means you can

choose to invest more aggressively, or you can leverage your buying

power, and therefore the returns on your investments.

7  Receive tax relief of between 20% and 50% on any contributions that you

make into your SIPP.

8  Avoid the compulsion to take an annuity.

9  Will the assets within your SIPP to your family and loved ones.

What are the disadvantages of a SIPP?

As you can tell, I’m a great advocate of investors having the freedom they need to make the most out of their capital, so for me it’s hard to find ANY disadvantages. But in the interests of balance, I’d mention the following:

1 There are set-up charges to pay a SIPP provider and an IFA for them to

administrate the changes to your pension. These vary according to whom

you choose, but commonly could be anything between £2,500 and £6,000.

2 There’ll be annual charges to maintain your SIPP, again these will vary,

but expect to be pay between £400 to £500.

Who exactly are SIPPs for?

When SIPPs started they were relatively costly to start and to administrate, so they were considered suitable only for High Net Worth investors. However, with an increasingly competitive market, the situation now is that any pension that has enough cash in it to make a SIPP worthwhile, can now benefit.

Consequently, today’s SIPPs are ideal for:

1  Anyone with a pension from as little as £25,000.

2  Anyone who is making the average paltry returns now associated with the

average annuity.

3  Anyone who wants to take advantage of the strong returns now

available from overseas property (these can easily reach 15% plus in

terms of income, or 10% plus in terms of capital growth).

If you think that a SIPP would increase the value of your pension – what should you do next?

NOTE: because everyone’s circumstances vary, I would always advise that you seek advice from your Independent Financial Adviser or a trusted financial source. Or if you wanted to get some idea straight away of the sorts of opportunities that might be available to you, you can always email me on: c.mansfield@davenport-wealth.com, I’d be more than happy to give you further details of what’s currently available for you.

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When Chris was an IFA, working with client’s wealth portfolios for over 19 years, he quickly developed a healthy regard for their need to see positive returns on their savings and capital. So now that he’s crossed into the world of unregulated investments (the international property market being just that), he’s one of a small number of overseas property brokers who can truly be said to bring a regulated attitude to an unregulated marketplace.

This would in itself be a breath of fresh air, but couple this with Chris’s robust insistence that clients deserve to get the best possible returns from their investments, with as much peace of mind as they can get, and you’ve got a rather formidable force, and one that’s certainly well worth listening to.