SIPPs

While this may seem to be a wise choice for many, remember there are many risks that come with the territory, especially if you don’t consider yourself an experienced investor.

Reid Scott & Ross are specialists in SIPP management and provide a bespoke service for a number of clients.Our advisers are able to simplify and streamline your affairs and help you to choose, buy, sell, hold and manage your investments. As a one-stop shop, we remove unnecessary duplication and give you the benefit of low, transparent charges and market-leading initial and annual savings on funds.

What is a SIPP? - A Self Invested Personal Pension (Sipp) is an investment savings vehicle aimed specifically at producing income – or a tax-free lump sum with a reduced income – in retirement. It is tax efficient and allows the holder a good degree of say in what investments are held.

The range of investments that you can hold in a Sipp are many and varied, ranging from stocks and shares to futures and options, and from collective investments such as unit trusts to bank deposits and commercial property.

The Benefits These Pensions Offer - There is a lot more flexibility when it comes to these pensions because you can not only invest in your regional market, but also trade in international markets by buying stocks and shares of international products and goods. You can also consider unit linked funds, investment trusts and commercial property too while looking for ways to invest the money you contribute towards SIPP pensions.

With SIPP pensions, you can engage in an aggressive investment strategy and still enjoy all the tax perks and benefits of a normal personal pensions program. This means you can save a lot more and earn a lot more than the conventional pension programs. There are drawbacks to consider though, SIPP pensions may seem too good to resist but all is not a bed of roses.

There are a few drawbacks that you will need to consider before taking a plunge into SIPP pensions. First of all, there is the cost of setting up these pensions. Most providers charge a fee of at least 1% of the total amount which can actually mean quite some amount of money. In addition to this, you will need to pay annual charges to keep it running. Also, every time you sell or buy an investment or make some income with SIPP pensions, you are charged on it. However, one of the main disadvantages is that the amount of money you can avail monthly during your retirement period is dependent on the strength of the investment you have made.

If your investment has failed badly, then, the amount you will get monthly will be pretty low and might not be sufficient to see you through the entire month. Hence, ensure you consider all aspects and plan well before you opt for SIPP pensions.