Retirement Planning Guide
Planning for retirement can seem like a daunting task but it is important to think about how you are going to support yourself financially in your later years.Download our guide
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|A tax efficient way to save for retirement|
|Get started with as little as a £25 contribution|
|View your portfolio 24/7 on our easy to use and secure platform|
|A wide range of funds, shares, investment trusts and ETFs|
|||You want to build your pension pot tax-efficiently.|
|||You’re comfortable with the risk involved.|
|||You want the flexibility to choose between a wide range of investment options .|
|||You want to transfer-in monies from a defined benefit pension scheme.|
|||You want your employer to make contributions into your SIPP.|
|||You know you’ll want to be able to access your money before age 55 (currently).|
A SIPP, or Self Invested Personal Pension, is a tax-efficient pension scheme designed to help you grow your retirement pot, with the aim of providing you with an income in retirement. You can choose from a wide range of funds, investment trusts, shares and exchanged traded funds (ETFs).
One of its main features is that you can get tax relief on your contributions. How much you get will depend on the level of your income. We reclaim basic rate tax relief (currently 20%) on your contributions and automatically add this to your SIPP. If you pay tax at higher than the UK basic rate, you can claim additional tax relief from HM Revenue & Customs, reducing your tax bill for the year.
The investments in your SIPP grow free of income and capital gains taxes. When you come to take your money out you can usually take out 25% of your pension pot tax-free, with anything else you take out being taxed at your marginal rate of income tax. When you come to take benefits, you can take one-off or regular payments directly from your SIPP or you can use all or part of it to buy an income for life (an annuity). The minimum age at which you can access the money in your SIPP is currently 55 and is expected to increase to 57 in 2028.
You can start investing from as little as £25, either as a lump sum or regularly. You can also transfer-in funds from your other pensions. There are limits to the amount that you can pay into pensions each year, while still benefitting from tax breaks. Most can put up to £40,000 into a pension in each tax year providing your contributions don’t exceed your earned income. The annual allowance of £40,000 can be lower for those with very high levels of income or if you’ve already taken money out of one or more of your pension pots. In some cases, you can carry forward unused allowances from previous years. The Willis Owen SIPP does not currently accept contributions from employers.
There is a limit to the total amount you can build up in pensions without having to pay tax charges. This is called the lifetime allowance which, for the 2022/23 tax year, is set at £1.073 million.
When investing you will pay a Willis Owen service fee as well as investment charges. If you invest in more specialist things like shares, investment trusts and exchange traded funds, you may also pay trade fees and government levies. Further details of all costs and charges can be found below and include VAT where applicable.
You can get an idea of how much you might pay in fees by using the ‘Charges estimator’.