The Flexibility of a SIPP and how it can work for you

Mon, Sep 5, 2016


The Flexibility of a SIPP and how it can work for you

While many words have been used to describe the general feeling across the globe after the Brexit referendum, uncertainty is perhaps the most accurate. After all, we have seen huge financial and economic turbulence in the US and Europe since Britain voted to leave the EU, while more recently the number of homes listed for sale on the UK property market slumped to a record low.

With the level of financial market activity also continuing to fall internationally, it has never been more important that citizens make the most of their earnings and build towards a more secure future.

Embracing a SIPP (Self-invested Personal Pension) and Making it work for you

In this respect, one of the best steps that you can take in the current climate is to consider leveraging a SIPP. Available through service providers such as Bestinvest, this type of investment plan can offer far greater levels of freedom than standard pensions. But how exactly does this flexibility manifest itself, and how can it benefit you as a contributor? Consider the following: –

  1. Access to a wider Range of Investment Vehicles

While some pension plans may be described as rigid, this is not an accusation that can be levelled at modern-day SIPPs. Arguably the main advantage offered by this type of pension plan is the sheer range of investment vehicles that it includes, with more than 2,500 funds and shares available to applicants. This has even greater benefit during a difficult economic climate, as it enables experts to diversify your investment interests and minimise any associated risk.

  1. Fluid Withdrawal Options to suit your Needs

Another significant benefit offered by a SIPP is the flexibility that it offers in relation to withdrawals. Depending on the precise account that you own as an individual, you will be able to withdraw a predetermined amount from your pension as a lump sum (usually 25%) while retaining the rest to be paid as regular income. Some accounts may even enable you to make more regular, but smaller, lump sum withdrawals, although this is not always a standard feature available to applicants in Europe or the UK.

  1. Benefit from Lower Costs and Service fees

The sense of freedom associated with SIPPs is also enhanced by the relatively low costs and service charges, which so often constrict pension plans and make them seem unpalatable. Some SIPP accounts can be maintained with an annual service fee of just 0.3% for assets of up to £250,000 ($350,000), meaning that you only pay a minimal percentage that is relative to the value of your account. For larger investments and asset classes these fees are reduced further, meaning that you can enjoy a far greater return when your plan finally matures.

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