What is a Sipp?
It is important however to start planning for your retirement as soon as possible to ensure you get the pest pension pot possible in those twilight years.
SIPP stands for self invested personal pension and it is quite simply a place for you to put your retirement savings. Anyone who wants to save for retirement can set up a SIPP and it gives you a great opportunity to take control of your retirement planning.
The key difference between a SIPP and a traditional pension is that you get to control where the money is invested. The breadth of choice is far wider also as you can use it to invest in anything from bonds, ETFs, gold and even boutique holiday resorts in the Caribbean subject to certain criteria
Depending on what type of investor you are you could go for something more sophisticated like Individual shares, look at SIPP trackers or if you are feeling really adventurous, futures.
The important thing to remember is that you should understand what you are investing in before committing your money. Some investment vehicles can be complex with no guarantee of a good return on investment, therefore for those new to investing, it is worth sourcing an agent who can talk through the options with you.
Contrary to popular belief setting up a SIPP is actually very easy to do. You can use an existing pension from previous employers that is currently frozen or transfer money from an existing pension if you find that it is not performing as you expected.
One thing you cannot do is invest in residential property with a SIPP, however there are ways to invest in property that is deemed to be commercial as long as the properties have been approved for SIPP investment.
There is surprisingly a good choice of investments in holiday property in Turkey, the Caribbean and even French hotels.
Before you decide to set up your own SIPP, decide whether you are a value, growth, or passive investor and make sure you do your homework and understand the investment fully before committing.