Why choose a SIPP?
Take control of your retirement savings: you choose how your pension is invested and have flexibility over how you take your benefits.
The Barclays Stockbrokers SIPP lets skilled investors choose their own investments from a wide range of options. This flexibility, combined with tax benefits, research and tools, makes this a powerful pension.
The Barclays Stockbrokers SIPP offers:
Control over your investments
While many pensions limit you to particular funds, our SIPP gives you total control over your investments. You can build your ideal portfolio from an extensive range of assets:
You also have flexible order types (including limit and stop orders) to manage your investments and online support including information on pensions and retirement, expert research reports and charting tools to inform your investing decisions.
Of course the value of investments can fall as well as rise, and you may get back less than you invested. If you are unsure, please seek independent financial advice.
Favourable tax status
Like all pensions, any money paid into a SIPP receives up-front tax relief at your marginal rate of income tax. The administrator automatically reclaims 20% basic rate tax from the Government. So if you want to add £1,000 to your SIPP, you only need to pay in £800, as HMRC will contribute £200 to it. Higher rate taxpayers can claim further tax relief – another 20% or 25% – through their annual tax return.
In addition, any returns you make on investments inside a SIPP are free from income tax and capital gains tax which will help your retirement savings grow faster. It’s worth noting that dividends on shares are paid out with a non-repayable tax credit which meets the liability of a basic-rate taxpayer on such income. So for basic-rate taxpayers, there is no income tax advantage to receiving dividends in a SIPP. However, there is an income tax benefit for higher and top-rate taxpayers where dividends are received in their SIPP. SIPPs, like other pensions, allow you to take as much of your fund in cash as you want when you reach the minimum retirement age, currently 55 ( rising to 57 by 2028). You have freedom to choose how you take your pension benefits It’s entirely flexible, the only rule is that the first 25% you take is tax-free and the rest is taxed at your marginal rate.
You can use a SIPP as your main retirement scheme or to supplement other pension plans. You can pay into a SIPP in the same tax year as you contribute to another pension scheme: for example, to make full use of your annual tax-efficient allowance assuming that you qualify for the full Annual Allowance this is £40,000 or 100% of your annual earnings, whichever is lower. You can exceed this limit, if you haven’t used up your annual allowances for the previous 3 years, and you were a member of a pension scheme then. You can carry forward any unused allowance, but you will need to have enough earnings in the current tax year to absorb the carry forward. If you have started taking benefits then the £40,000 allowance will be replaced by a lower allowance, the Money Purchase Annual Allowance, of only £10,000, and you won’t be able to use carry forward.
The flexibility that SIPPs offer when you take pension benefits again mean that this can be your main source of income or can supplement the other schemes you have. For example you may use a SIPP to build up supplemental savings and maximise tax efficiency and then withdraw lump sums over a few years using Flexi–Access Drawdown for house repairs, a new car and possibly to pay for a couple of holidays; whilst you rely on your main pension savings to provide a retirement income.
Take control of your existing retirement savings
If you have built up a number of pensions with different employers over the years, you may find it difficult and time consuming to keep track of your overall retirement savings. By transferring your pensions to a Barclays Stockbrokers SIPP you can take control of how they are invested. Be aware it may not be in your best interest to move certain pensions, for example defined benefit pension schemes like final salary plans. You should also reflect carefully on whether you are giving up valuable benefits by moving assets out of an employer’s defined contribution scheme, particularly if you are still working for that company. Find out more about the pros and cons of transferring pensions
Remember, the Lifetime Allowance (the maximum value of all your pensions) fell from £1.25m to £1m on 6 April 2016. If this amount is exceeded, and you don’t seek Protection from HMRC, you will be subject to additional tax on the amount over £1m, whenever you take benefits.