Vantage SIPP - frequently asked questions

Why are SIPPs becoming so popular?

SIPPs offer the same great tax advantages as other personal pensions but provide greater investment flexibility, allowing you to choose where you invest your pension. Therefore the SIPP allows you to take control of your pension and manage it at a level that suits you. The Hargreaves Lansdown Vantage SIPP has no set-up fee and low annual fees (in many cases no annual fee) meaning more of your money gets invested.

Can I take out a SIPP alongside other pensions?

Yes you can. Although you should be aware of your personal contribution limit and the annual allowance. Use our interactive contribution guide.

Do I have to decide where I invest my money straightaway?

No, you can hold all or part of your funds in cash until you choose where to invest them. The HL Vantage SIPP will provide you with a competitive rate of interest on the cash value.

Do I have to contribute a minimum amount?

Single contributions to the HL Vantage SIPP must be a minimum of £1,000 gross (you pay in £800, then £200 is added in basic rate tax relief). Monthly direct debit contributions must be a minimum of £50 gross (you pay in £40, then £10 is added in basic rate tax relief in 2008/09 tax year. Transfers from other pension plans must be a minimum of £5,000.

Monthly direct debit contributions must be a minimum of £50 gross (you pay in £39, then £11 is added in basic rate tax relief in 2007/08 tax year. Thereafter you pay £40 with £10 added in basic rate tax relief).

Transfers from other pension plans must be a minimum of £5,000.

Can I invest in residential property?

No. While original legislation allowed investment in residential properties this has effectively been stopped. You can however choose to invest in property funds if you wish.

Can I invest in commercial property?

Investment in commercial property is available with some SIPP providers, although this facility is not currently available with the HL Vantage SIPP.

Can I withdraw my money at any time?

No. Once invested in a pension you cannot withdraw those funds until retirement. This must normally be done between the ages of 55 and 75 (50 and 75 before 2010). Then you will normally be able to take up to 25% of the fund as a tax free lump sum and use the remainder to provide a retirement income which will be subject to tax - either via an annuity or income drawdown.

Can I change my investments?

Yes. A SIPP gives you the flexibility to choose and change your investments when you want. With the HL Vantage SIPP you can even do this online.

Do I earn interest on the cash I hold in my SIPP?

Yes. View the current interest rates for cash held in the HL Vantage SIPP.

Can I transfer my existing pension into a SIPP?

You can normally transfer the following types of pension into our SIPP:

Personal Pension Plan
Stakeholder Pension Plan
Retirement Annuity Contract
Other SIPP
FSAVC (Free Standing Additional Voluntary Contribution plan)
EPP (Executive Pension Plan)
Most paid up Occupational Money Purchase Plans

The process normally takes 4-6 weeks to complete and is surprisingly straightforward, plus Hargreaves Lansdown do not charge for transferring a pension into the Vantage SIPP. If the pension type you wish to transfer is not listed above you may still be able to transfer your pension into the HL Vantage SIPP but there may be further requirements. Please call our helpdesk on 0800 138 2121 for more information.

Please note that there is a minimum transfer value of £5,000. If you are looking to transfer a number of plans, provided their combined worth is over £5,000 this should be fine.

Protected rights are not currently permissible within a SIPP and therefore cannot be transferred to the Vantage SIPP. You may however be able to transfer such funds to either a more conventional personal or stakeholder scheme. Draft legislation has been announced which should allow Protected Rights to be held in a SIPP from October 2008; however this has not yet been confirmed.

Can I deal and view my pension online?

With the HL Vantage SIPP you can view the value of your pension online at any time as well as place deals and add further contributions. This really helps put you in full control of your pension.

Can my employer contribute to my SIPP on my behalf?

Yes, they can contribute by cheque and/or by direct debit. Employer contributions are paid gross, meaning they should not deduct basic rate tax relief from the amount they contribute. For more information please contact our helpdesk on 0800 138 2121.

Can I open a SIPP for my child / grandchild?

Yes, plus the contributions still receive basic rate tax relief. The tax relief will be based upon your child / grandchild's status and not your own, meaning the amount you can contribute to your own personal pension will remain unaffected. Also, as they have no access to the money until their retirement it also means they can't fritter it away.

Can I transfer an occupational pension to a SIPP?

Yes, the HL Vantage SIPP can accept transfers from Free Standing AVCs (FSAVCs), most paid-up money purchase occupational schemes, and Executive Pension Plans (EPPs). We can accept transfers of other occupational schemes but may require that you take advice from a professional financial adviser.