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The IC Guide to Sipps

Mary McDougall explains how Sipps can help secure your financial future
The IC Guide to Sipps

Key Points:

  • A self-invested personal pension (SIPP) is a pension ‘wrapper’ that holds investments until you retire and start to draw a retirement income
  • Sipps enjoy the same tax benefits as a standard personal pension
  • You can use them to invest in many different assets

Rarely a week goes by without pension scare stories in the press about how the pension funding shortfall is getting worse. There are many reasons for this: the decline in final-salary pension schemes, an increase in life expectancy and very low interest rates coupled with inflated assets lowering expectations of future returns. 

The pandemic has dealt an extra blow. More than 5.5m workers cut or completely stopped their pension contributions owing to the impact of Covid 19, according to pension provider Scottish Widows. Insurer LV= estimates that 211,000 people aged 55 to 64 have accessed some of their pension savings early to supplement their income because they have been made redundant or their earnings have been reduced. AJ Bell, meanwhile, says that one in 10 people aged over 55 have accelerated plans to access their pension as a result of the pandemic.

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