The range of pension plans available in the marketplace is vast and with greater choice and flexibility comes more confusion and potential pitfalls in lost allowances and guarantees. The rules and legislation are now more complex than ever. The need for tailored independent advice, rather than off the shelf guidance is essential, and therefore our financial planners are able to guide you through these options in a jargon free way.
Self Invested Personal Pensions (SIPPS)
These are a type of personal pension scheme offering individuals control over how their pension investments are managed. The SIPP itself is a pension ‘wrapper’, holding investments until retirement when the investor is looking to receive income from those investments. SIPPs allow investment into a range of assets including commercial property, rather than just investment funds and shares. As with any pension fund, the investor cannot take money from the fund until the age of 55. Following changes brought in by the pension freedoms legislation, pensions now offer more flexibility in determining what income you wish to receive from your pension plan and when. This gives more options for the long term investment of pension funds and greater flexibility for investment managers to select appropriate investments for the longer term all within a tax efficient “wrapper”.
A Small Self-Administered pension Scheme (SSAS) is an occupational pension scheme that is set up as a trust by the directors of a company that wish to take more control over the investment options available to their pension assets. To qualify there must be fewer than 12 members, all of whom are trustees.
There are significant investment choices and options available to a SSAS over and above a typical company pension scheme or SIPP. An example is that a SSAS can make secured loans back to the sponsoring employer. To discuss if a SSAS is suitable for your directors or you are maximising the advantages of your current arrangement, speak to a Pharon financial planner today.