Self-Invested Personal Pensions (also known as ‘SIPPs’) are being used by a rising number of private investors keen to take control of their retirement planning. First introduced in 1989, SIPPs have evolved into the favoured investment vehicle for individuals seeking more control and flexibility in their retirement planning.

SIPPs are a form of pension available to all investors who choose to invest into a private pension, but they have one distinctive element: they allow the investor to self-invest, or to take control of the pension (which is why sometimes they are referred to as ‘self-controlled’ pensions).

The SIPP itself is essentially a type of tax-free wrapper in which you hold a wide range of permitted investments, and the contribution limits, tax reliefs, eligibility and the age at which you can start drawing an income are all exactly the same as other pensions.

Favourable tax treatment associated with SIPPs may change in the future, and the value of this tax treatment to you will depend on your individual circumstances, which can also change. The only major difference between a standard personal pension and a SIPP is the self-investment element – one that creates a series of advantages for pension investors to benefit from.

Investing in a SIPP is a tax-efficient way to save for your retirement. Not only do your investments grow free from Income Tax and Capital Gains Tax, but you are also eligible for tax relief up to 45%.