Sipp Pension Recommendations

toocan

Being the owner of a small company I need to take out a Sipp pension and am wondering where the best place for impartial recommendations would be?

dunstonh

I need to take out a Sipp pension

Why do you need to have a SIPP and not say a stakeholder pension or more likely a personal pension?

where the best place for impartial recommendations would be?

An IFA. Go fee basis and get the fee collected via the pension (if sole trader) or by the company (if limited company).

toocan

dunstonh wrote: »

Why do you need to have a SIPP and not say a stakeholder pension or more likely a personal pension?

I was adviced by an accountant that a SIPP would be best as you can use the capital in it to say purchase office space etc.

jamesd

How soon do you expect to have enough money in the pension to pay say a 25% deposit to buy the office space?

If the answer is many years then you may instead do better to use a personal pension rather than a SIPP. The SIPPs that allow direct property purchase tend to be fairly expensive compared to SIPPs that don't or other forms of personal pension.

A reason to use a SIPP today would be a desire to hold investments that can't be held in a personal pension. Things like direct holdings of individual shares or warrants.

You can transfer the pension pot or part of it into a SIPP that allows direct property purchases later and save the higher costs for now.

dunstonh

toocan wrote: »

I was adviced by an accountant that a SIPP would be best as you can use the capital in it to say purchase office space etc.

Would you be utilising those features though in the near future?

Its all very well having a SIPP that can utilise more direct investments but if you dont use the SIPP for that purpose and go with say funds instead, then it can become an expensive folly compared to personal pensions (estimates have over 90% of SIPPs taken out since 2006 as using funds and not the things they were designed for).

purch

if you dont use the SIPP for that purpose and go with say funds instead, then it can become an expensive folly compared to personal pensions

Other than that, it sounds like a good idea then :eek:

toocan

I believe a SIPP can be written off against the corperation tax bill at the end of the year is it the same with a personal pension?

Cautious_Investor_3

jamesd wrote: »

How soon do you expect to have enough money in the pension to pay say a 25% deposit to buy the office space?

QUOTE]

Hi

To buy an office through a SIPP you need more than a 25% deposit due to the SIPP borrowing rules.

Essentially s SIPP can borrow up to 50% of its assets.

Therefore if a SIPP has a balance of say £100k it can borrow a further £50K, making the LTV ratio 33.3%.

The Cautious Investor

Cautious_Investor_3

toocan wrote: »

I believe a SIPP can be written off against the corperation tax bill at the end of the year is it the same with a personal pension?

Yes, the rules re tax relief on a SIPP are the same as for a Personal Pension, and indeed, a Stakeholder

dunstonh

toocan wrote: »

I believe a SIPP can be written off against the corperation tax bill at the end of the year is it the same with a personal pension?

Basically, the rules for stakeholder, personal and SIPP are all the same. They are just three variations of the same theme.

stakeholders are the basic option. Simple charging method with simple investment choice.

Personal pensions can offer stakeholder range investments as well as a much wider range of investment options. Most offer investment funds as the investment choice. Personal pensions have a wider range of charging methods and typically for those with more than 15 years until retirement, the right personal pension can be the cheapest method.

SIPPs allow access to direct investments and more unusual ways to invest. They are designed and priced for people using those options. They are typically the most expensive option for investment funds. Although, if you use them for more specialist investments then the extra cost can be worth it.

SIPPs are oversold and overbought. They have become fashionable and far too many people have bought one when they shouldnt have. It doesnt make them wrong as they are fine when you use them correctly but do not be caught up with the marketing of these.