SIPPs

A Sipp or self invested personal pension is a type of DIY pension. Unlike a normal pension, where the pension company limits your choice of investments it manages a Sipp gives you complete control of your pension fund.

With a Sipp you choose your investment. When you retire, you can use the assets either to provide you with an income or purchase an annuity.

The main advantage of a Sipp over other types of pension plan are that they offer greater flexibility, wider choice of investments and potentially lower charges.

Beware! A Sipp is for someone who understands investing and the research involved. Making the wrong investment choice would leave you with only one person to blame! Yourself!

For earners you can contribute up to 100% of your annual earnings before tax, up to a limit of £235,000 for 2008/2009 rising to £245,000 in 2010/2011. Non-earners can contribute up to £3,600 per tax year and still get basic-rate tax relief.