| SIPP is an abbreviation for Self Invested Personal | | | | unhappy with the returns of a particular investment |
| Pensions. As the name implies, this is a pension plan | | | | option. Unlike in the case of personal pensions where |
| where you are the contributor and the investor. | | | | switching from one pension provider to the other will |
| Unlike the conventional and traditional pension plans, | | | | involve certain amount of money, SIPP pensions go |
| SIPP pensions offer you the benefit of doing your | | | | light on your pocket. |
| own investments. While this may seem to be a wise | | | | With SIPP pensions, you can engage in an aggressive |
| choice for many, remember there are many risks | | | | investment strategy and still enjoy all the tax perks |
| that come with the territory, especially if your | | | | and benefits of a normal personal pensions program. |
| knowledge of finances and investments is meager. | | | | This means you can save a lot more and earn a lot |
| What are SIPP pensions? | | | | more than the conventional pension programs. |
| Before we proceed to knowing the pros and cons of | | | | The drawbacks to consider |
| SIPP pensions, let us try to understand them better. | | | | Though SIPP pensions see too good to resist, all is |
| In simple words SIPP is nothing but do-it-yourself | | | | not a bed of roses. There are a few drawbacks that |
| personal pensions. The need for these types of | | | | you will need to consider before taking a plunge into |
| pensions arose because innumerable people who | | | | SIPP pensions. |
| invested in pensions were not very happy with the | | | | First of all, there is the cost of setting up these |
| funds being invested erroneously by fund managers | | | | pensions. Most providers charge a fee of at least 1% |
| without sufficient knowledge of the market trends. | | | | of the total amount which can actually mean quite |
| Hence, most people desired the option of having a | | | | some amount of money. In addition to this, you will |
| say in the way the pension funds were invested and | | | | need to pay annual charges to keep it running. Also, |
| that is how SIPP pensions came to existence. | | | | every time you sell or buy an investment or make |
| The benefits these pensions offer | | | | some income with SIPP pensions, you are charged on |
| There is a lot more flexibility when it comes to these | | | | it. |
| pensions because you can not only invest in your | | | | However, one of the main disadvantages is that the |
| regional market, but also trade in international | | | | amount of money you can avail monthly during your |
| markets by buying stocks and shares of international | | | | retirement period is dependent on the strength of |
| products and goods. You can also consider unit linked | | | | the investment you have made. If your investment |
| funds, investment trusts and commercial property | | | | has failed badly, then, the amount you will get |
| too while looking for ways to invest the money you | | | | monthly will be pretty low and might not be sufficient |
| contribute towards SIPP pensions. | | | | to see you through the entire month. |
| With SIPP pensions, you will have the option of | | | | Hence, ensure you consider all aspects and plan well |
| switching your investment options easily if you are | | | | before you opt for SIPP pensions. |