S.I.P.P.’s are currently the fastest growing pension vehicle in the market place and it is forecast they may well become the mainstream product in UK pensions in the very near future.

The main attractions are:

• Generous tax benefits (no income tax/CGT in UK, so there are no UK taxes payable on rental income or capital gains)
• Of every £1000 contribution, the government contributes £220 (for basic rate taxpayer) i.e. there is a “net” personal contribution required of just £780. Higher rate tax payers can claim an additional 18% of the contribution via their annual self assessment process
• Wide choice of tax-free investments
• Able to take an active role in the management of your own investments
• Since April 2006 significantly larger annual contributions allowed
• Greater freedom to ensure all benefits passed to surviving beneficiaries
• A wider choice of arrangements and timescales to draw down income benefits
• The ability to schedule income as personal circumstances dictate

Add to this that it’s a very simple structure – a wrapper for your investments effectively – and it becomes easier to see why so many people find them an attractive option compared to traditional insurance company funds.