At Jacobs Financial, as Chartered Financial Planners and Independent Financial Advisers (IFAs), we are highly qualified and experienced in the specialist area of pensions and their legislation, and can guide clients through this very technical but essential part of financial planning.
We are able to assist with very complex arrangements, particularly for high earners or those with larger pension funds who will have a wider range of choices open to them.
Self Invested Personal Pensions (SIPPs)
Pension legislation changed dramatically on 6th April 2006 in an attempt to simplify the multitude of rules that apply to pension products. One of the significant changes at this time was for some restrictions to be lifted, allowing any individual to invest in a SIPP.
A Self Invested Personal Pension Scheme (SIPP) is a tax-efficient ‘wrapper’ within which a wide range of investments can be held. A new SIPP must appoint a scheme administrator, usually the recognised product provider. SIPPs have the same tax benefits and regulations as conventional personal pension plans but you and/or your advisers have control over the investment choice - each SIPP is unique to the individual. Otherwise, it operates in the same way as a conventional personal pension in respect of contributions and eligibility for Her Majesty's Revenue & Customs (HMRC) purposes.
The range of permitted investments is extensive and includes the more conventional ones such as deposits, unit trusts and stocks and shares, as well as more unusual assets such as commercial property. The complex nature of a SIPP means that it is not suitable for all investors. Often, the benefits of ‘self investment’ are only advantageous to people with very large funds and/or investors with some level of sophistication when it comes to investment decisions. Often, there are additional charges for arranging and dealing within a SIPP which would erode smaller funds quickly. However, they can also provide access to a wide range of active fund managers giving the potential for a higher return.
SIPPs allow individuals to consolidate deferred company and private pensions in one place, take control of their savings and invest more flexibly into a wider range of assets and funds. However, advice should be sought before transferring any previously accrued pension, especially when such pensions are from defined benefit (final salary-related) schemes.
Jacobs Financial, through its Wealth Management Service, uses low-cost SIPPs to build bespoke investment portfolios tailored to each client’s needs. We can offer a low cost SIPP with access to over 1000 collective investment funds (unit trusts, OEICs etc) with no initial charge, meaning a discount of up to 5.5% on normal retail cost. So, there is no need for our clients to put up with lacklustre insurance company performance any more or suffer bond type rates from many closed with profit funds. People with old fashioned expensive pension plans may also be better off switching to a low cost SIPP.
In addition, we have our own administration systems that allow us to provide a bespoke pension solution, which can include a SIPP arrangement.
Jacobs Financial Ltd
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