What is a SIPP?

A SIPP (Self Invested Personal Pension) is a type of pension that gives you greater choice and control over where you can invest your money.

Most traditional pensions only allow you to select from a limited list of funds, normally run by the pension company's own fund managers. A SIPP is different. It allows you to choose from a wide range of funds and other investments - even individual stocks and shares (much as you may do with your ISA).

A SIPP enables you to select the most potentially profitable investments and therefore maximise your returns – giving you a pension that's really working for your retirement.

Saving in a pension such as a SIPP has significant tax benefits. The government will contribute 20% of every gross contribution you pay - meaning a £1,000 investment in your SIPP costs you just £800. If you’re a higher rate tax payer, the tax benefits could be even greater. In the above example you could claim back as much as a further £200 via your tax return if you have sufficient income or gains in the higher rate tax bracket.

When you wish to withdraw the funds from your SIPP, between the ages of 55 and 75 (50 and 75 before April 2010), you can normally take up to 25% of your fund as a cash lump sum, free from tax. The remainder is then used to provide you with a taxable income.

Thank you for the swift and efficient way you have handled our SIPP applications. As always, your forms are straightforward and your service exemplary.

Mr & Mrs Longcroft, Hampshire

Starting a SIPP couldn’t be simpler and the Hargreaves Lansdown Vantage SIPP gives you the flexibility to invest lump sum amounts whenever you wish or set up a monthly direct debit which you can change at any time. We’ve made the application form so simple that it shouldn’t take you more than 10 minutes to complete once you have read all the information.