Our online pension is designed for those with uncomplicated financial arrangements, who do not want to pay up front charges, but still want to benefit from proactive investment monitoring.
Because no initial charges are applied, your entire fund is working from you from day one, whilst if you are at all unhappy, you can transfer your pension away at anytime without any charges.
Tax relief on your personal contributions are added instantly (rather than the normal ten weeks it normally takes a SIPP provider to reclaim your tax).
Switching between investments held within your pension can normally be achieved within 24 hours. Usually, SIPP providers will take around 5 working days to complete a switch during which time your money is not invested.
The investments held within our suggested portfolios are professionally selected and constantly monitored. The managers that we employ know what is expected of them all of whom can be replaced within days if they do not meet with our expectations. We simply email you when a change is necessary.
Periodically, we will let you know when a ‘re-balance’ could be advantageous. A rebalance is used to reset the investments to their original position. Over time the investments held within the portfolio will inevitably perform differently. The rebalancing process allows you to take profits from the investment sectors that have done well, increasing exposure to investments that have underperformed (the theory being that last years winners will be next year’s losers and vice a versa). A rebalance can take place within 24 hours.
A pension plan is merely a method of saving for your retirement in a tax efficient manner. The payments you make attract income tax relief (for every £80 contributed £100 is invested). Higher rate taxpayers can claim a further £20 tax relief for every £100 invested. In addition, a pension plan grows pretty much free of income tax and completely free from capital gains tax.
The Government provide rules on how and where the money in a pension can be invested. A mixture of shares, corporate bonds, deposit accounts and property is typically used.
Once contributed, your money cannot be accessed until a minimum age 55 - at which point you can draw a lump sum equal to 25% of the fund value tax-free and the remaining fund will be used to provide an income, which is taxable. You are restricted to a maximum contribution that is the greatest of 100% of your salary or £3,600 in any one-tax year. Employers can contribute significantly more.
In the event of death, the fund is usually paid to your nominated beneficiary completely free from tax usually in the form of a lump sum. Sometimes the fund will be paid out in the form of an income. This is usually the case for the ‘protected rights’ element of the pension arrangement.
Your fund cannot exceed a lifetime limit - which started in April 2006 at 1.5 million and will increase to 1.8 million in 2010. For those with pension funds exceeding this limit (at retirement) tax charges/penalties will be levied.
The Government intends, from April 2011, to restrict tax relief for individuals with an annual income of £150,000 or more. Relief will be tapered away so that those with an annual income over £180,000 per annum will receive 20% relie.
Preventative measures have been put in place from April 22nd 2009, restricting relief for those earning more than £150,000 to 20% on contributions in excess of £20,000. When you decide to draw your benefits you will have some options. Go to our retirement section for further information.