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What type of pension do you have? > Self-Invested Personal Pension SIPP

5. Self-Invested Personal Pension SIPP & SSAS

A SIPP is similar to a personal pension but offers more flexibility with the investments you can choose.

A SIPP is well suited to somebody who has a financial adviser helping them select funds and make choices, or, they want a lot of options under their own control contact Cambridge Pensions.

Self-Invested Personal Pension SIPP

SIPPs sometimes have higher charges than other types of pensions, however, some providers charge no more for a SIPP than a Personal Pension.

The range of assets and funds allowed in a SIPP include;

  1. Commercial property
  2. Some NS&I products
  3. Deposit accounts with banks and building societies
  4. Traded endowment policies
  5. Insurance company funds
  6. Unit Trusts
  7. Investment trusts
  8. Government securities
  9. Individual stocks and shares quoted on a recognized UK or overseas exchange

Different SIPPs provide a different range of options, so check these first.

Some SIPPs even accept investment into residential property (generally not allowed to be invested in within pensions) through things such as real estate investment trusts.

SIPPs provide a very flexible range of income options from age 55.

Small self administered schemes SASS

Small self administered schemes (SSASs) are occupational defined contribution pension schemes that are aimed at company directors and senior employees. A SSAS is defined as a self administered scheme that has less than twelve members, all of whom must be trustees. SIPPs and SSASs have a lot of features in common, however, they also have some important differences, one of which might interest company owners….being able to loan back to the company

Rules for loans;

  • The loan must be repaid by equal annual instalments of capital and interest.
  • The loan must be secured on an asset owned by the company, or some other person.
  • The loan must be a first charge.
  • There must be no other charge on the asset that takes priority over that made by the scheme.
  • The term of the loan must not be longer than five years.
  • The loan must be at a commercial rate of interest, at least 1% above the average base rate of six leading clearing banks rounded up to the higher 0.25% if the resulting figure is not a multiple of 0.25%.
  • The cost of borrowing from the SSAS would therefore be very significantly below the current rental yield

SSASs require a much higher level of member administration than other pensions

Contact Cambridge Pensions for further information regarding your SIPP.