Manage your investments as well as your future with SIPPs

Investing for the future can be incredibly confusing what with the ever increasing choices that are available to people nowadays, but there's one increasingly popular form of pension that is easy to understand and offers a much more open range of options: SIPPs. Standing for Self-Invested Personal Pension, it's a type of personal pension that gives you the opportunity to get great tax rebates in exchange for accessibility to your investment. It's the ideal pension solution if you're the kind of person who is happy with plenty of future planning.

Why should you decide on SIPPs?
Following their introduction back in 2006, SIPPs have become increasingly popular amongst investors who like to understand where their money is going and how it works on their behalf. If you happen to have a good variety of assets, it's certainly a great way of incorporating as many of them as possible into something that will provide for your later life. Pensions can then be improved yet further by adding in other elements such as traded endowments policies and cash; there's even provisions set up for those who wish to use gold bullion.

While almost any asset is allowed when organising what is to go into your SIPPs, there are a few types that could potentially have a negative effect so be sure to seek the help of a professional financial advisor. Assets such as vintage cars, stamp collections and cellars of wine are rated as exotic assets, while more mundane things like residential property can also see your pension attracting rather heavy taxes. This isn't to say that inclusion is illegal; it's simply down to the fact that they will be taxed heavily if they are brought in.

The different types of SIPP - pensions for your preferred level of control
There are actually three separate types of SIPP; pensions can either be described as Deferred, Hybrid or Pure. In the first case, decisions on what investments will be made are put off until a future date while assets are held in an insured pension fund, while Hybrids offer a mix of a standard scheme with some elements of self-investment. Pure SIPPs mean that you'll have access to a near unlimited range of investments; again, speaking to a professional will help you discover what's best for your situation.

When you reach the age of fifty-five, legislation declares that you're then legally allowed to remove a lump sum from your SIPP. Pensions law then requires you to move the rest of the money into a drawdown or purchase an annuity that will keep you set up for life. It's really just a matter of discovering what is best for you, but one thing's for sure; you should ask about SIPPs today.

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