Self-Invested Personal Pensions (SIPPs)
A Self-Invested Personal Pension (SIPP) is a personal pension that allows you access to a wider choice of investments when it comes to saving for your retirement.
Prudential's SIPP is available through the Self Invested Fund option on the Flexible Retirement Plan.
If you don't already have a Flexible Retirement Plan you'll need to apply for one when starting your SIPP. To do so, please speak to your financial adviser about setting up the Flexible Retirement Plan with SIPP options.
- bullet Contributions to a Self-Invested Personal Pension qualify for tax relief.
- bullet You can invest your contributions in a wide range of funds.
- bullet Complete control over your investment.
- bullet Access to the Flexi-access Drawdown option.
- bullet Flexible charging structure.
Risks and considerations
- bullet This product is only available through a financial adviser.
- bullet The value of any investment can go down as well as up and so you may not get back what you put in.
- bullet Tax relief will depend on your individual circumstances and is subject to change in the future.
- bullet Charges could be higher in the future.
There are various reasons why you could consider saving into a SIPP. For example:
- You can make flexible payments - once you've started your SIPP with a minimum £10,000 payment, you (or your employer) can make further contributions as and when you wish. The minimum regular contribution is £100 and minimum additional single contribution is £200, subject to HM Revenue & Customs (HMRC) limits.
- Flexible charging structure - you pay depending on the range of funds you want to access. Bear in mind charges may vary in future and may be higher than they are now.
- Wide range of investments to choose from - you'll have access to our:
- Core multi-asset funds, including With-Profits and PruFund, with guarantees available.
- PruSelect range, chosen by independent research company Morningstar OBSR.
- Five Dynamic Portfolios targeting different levels of risk and potential return and our unique combination of experts - Prudential's Portfolio Management Group for asset allocation and OBSR for fund selection and recommendation.
- There is also a lifestyle option to help you manage risk by automatically switching into funds with lower risk profiles as you approach your selected retirement age.
- You can also choose funds through the Cofunds supermarket with our lower cost FundSIPP (up to 20 funds) or the full range of investments through the Full SIPP. The SIPP option can be switched on or off at any time so you pay only for what you use.
- Tax relief - subject to HMRC limits, for every £80 you invest in your pension, the government will pay a further £20 tax relief. If you earn above the basic rate of tax, you can claim additional tax relief through your tax self-assessment form. See our tax relief calculator for more or read about the tax benefits of saving in a pension. You are also allowed to usually take up to 25% of your fund as tax-free cash when you retire.
- Complete control - you'll have total say over your investments so long as they are within the range of assets allowed by the plan. You'll need to actively manage your SIPP, perhaps in conjunction with a financial adviser.
- Flexi-access Drawdown option - this lets you take an income from your pension fund from age 55 as and when you want to. You can also choose how the rest of your fund remains invested.
Pensions and tax
Paying into a pension plan attracts tax relief (which is restricted), this is known as the annual allowance. You usually pay tax if savings in your pension plan go above the annual allowance. When you're ready to take your pension benefits, if all of your benefits exceed a lifetime allowance you may be subject to a tax charge. You may also have to pay tax when you start taking an income from your pension.
Understanding all of the tax rules can be very complicated so we’ve prepared a guide to show how this may affect you. Our Questions & Answers document provides information such as:
- Tax relief on pension contributions and the limits
- Annual Allowance
- Tapered Annual Allowance
- Money Purchase Annual Allowance
- Lifetime Allowance
- Pensions Protection
You can also get more information on the gov.uk website by visiting www.gov.uk/tax-on-your-private-pension.
Read more about the tax benefits of saving in a pension. Additionally see our Income Tax and Tax Relief Calculator to see how much money your pension contributions could get with the help of the tax man.
To learn more about the Flexible Retirement Plan with SIPP options please see the following:
- Flexible Retirement Plan/Self-Invested Personal Pension Key Features
- Flexible Retirement Plan Transfer Key Features
- PruFund Range of Funds: Guarantee Options
- Flexible Retirement Plan technical guide
- Flexible Retirement Plan (Personal Pension and Income Drawdown with SIPP Options) & Flexible Investment Plan - long fund guide
Are you an existing customer?
If you are an existing customer please visit our dedicated Self-Invested Personal Pension page in the customer section of our website.
How to set-up a financial review meeting
We believe that getting financial advice is vitally important. So, if you don’t already have an adviser, set up a face-to-face meeting with a Prudential Financial Planning adviser in your area. We can review your retirement plans and help make your finances more tax efficient. We offer a restricted advice service.Find out about our face-to-face service
We are not recommending one product over another. We recommend you seek financial advice if you’re unsure about what product could be right for you. The information above is based on our understanding of current taxation, legislation and HM Revenue & Customs practice, all of which is liable to change without notice. For more information please visit www.hmrc.co.uk.