Property SIPP Pensions
A SIPP is a self-invested personal pension, a pension plan that enables the holder to choose and manage their investments.
A SIPP scheme gives a greater choice of investments that would otherwise be impossible with a traditional pension. You still get all the same great tax benefits, but now you get to make the investment decisions. You can invest directly in high yielding property, for example, something you cannot do with a traditional pension.
There are SIPP rules that need to be adhered to when investing in property with a SIPP and we have expert knowledge to ensure you can make an informed decision. If your plan is to invest in property through a fund or as a direct investment then a SIPP could be the right pension for you. A property SIPP can cost as little as £500.00 per year and high yielding property investments can generate substantial returns. Much of the money you save is as a result of making investment decisions yourself.
Key Benefits of a Property SIPP
- Invest in property
- Fixed investment returns of up to 12% p.a.
- Consolidate Pensions
- Simple 7 day set up process
If you are a company director a SSAS pension has far more benefits for you than a SIPP pension.
I'm a director
Transferring old company pensions or private pensions into a SIPP is possible, in fact it is quite straightforward.
However, you must have made a decision on your investment plans before you set up a SIPP. This is because not all SIPP scheme providers allow the same investments, some are more flexible than others so it is important that you get help to choose the right SIPP scheme provider.
Whilst a SIPP attracts tax relief on contributions from a member, a SIPP can also borrow against its own value to increase the scope of investment. The maximum a SIPP can borrow is 50% of its value. So, for example, a SIPP that has assets and cash worth £100,000 could borrow a further £50,000.
Many of our clients acquire commercial property and land for development within a SIPP but there are equally as many that simply want a ‘hands-off’ approach where they can get the highest yielding return from a property investment. The investment page on this website has a comparison chart of some leading investments that can be held in a SIPP or a SSAS.
If you are searching for SIPP investments then please visit the investment page.
It should be noted that it is not possible to invest in residential property using a SIPP.
It should be noted that it is not possible to invest in residential property using a SIPP. However, there are other options such as commercial property or land that can be purchased. It is also possible to develop a residential plot. There are strict rules which consultants at TLPI know and understand to help you avoid making mistakes.
Property SIPP FAQs
Can I transfer current, frozen or former company pension schemes into a property SIPP?
Yes, often people transfer in their old or current pensions, you simply contact the old pension providers and get them to transfer the funds into your SIPP. This is very straight forward and often accounts for how people start a Property SIPP. Your old pension provider will send some paperwork in the post which you need to sign and return to them.
You should consider if there are any benefits you are giving up by transferring your old pension because when you move the pension these will be lost. You can ask your pension provider to give you this information in writing or over the phone.
Are there any drawbacks to a Property SIPP?
Only when compared to a Property SSAS but other than that a Property SIPP still gets the same tax advantages, 25% tax-free cash at age 55 and flexi-drawdown as permitted by recent pension changes. A Property SIPP is a great pension if you want to invest old pensions into property.
Why choose a Property SIPP?
A Property SIPP is a great pension if you want to invest in property. You can pool all of your old pensions into a SIPP and invest them in property, you can even borrow 50% of the total combined value as a loan from the bank to give you even more money in the Property SIPP. A Property SIPP is a pension designed for individuals who are not company directors that want control over the investments in their pension, however if you are a company Director then a Property SSAS may be right for you. Have a look at our Property SSAS information page to compare but bear in mind the best option is to talk to us. We have huge experience in helping our clients choose the right type of property pension.
What is a Property SIPP compared to a normal SIPP?
Nothing, other than a Property SIPP is one that is administered by people who know and understand property investments. A Property SIPP allows you to make all the same investments as a normal SIPP but when it comes to making an investment in property you want property people to be there to answer your questions immediately and to deal with the process of acquiring or disposing of property promptly.
What is most appealing about a Property SIPP?
Property SIPP will allow an individual to invest their pension in property in addition to traditional investments. Traditional pensions are very restrictive over investment choice and they are also quite expensive when you add in adviser costs.
If you know and understand what investment options you want to make then you can do this using a Property SIPP without having to pay someone to conduct the transactions on your behalf. Essentially a Property SIPP allows you to take control of your pensions.
How much does a Property SIPP cost?
The annual cost for a Property SIPP is from £500 but the total fees will depend on your investment plans. A Property SIPP is a low-cost way of taking control of your money and investing it as you choose. The main saving that you make is as a result of not having to pay an adviser. You can make all the investment decisions yourself when you have a Property SIPP. This is not to say that you can’t employ an advisor if you want to, it just gives you the choice rather than having to use one all the time.
Why choose a Property SIPP over a Property SSAS?
A Property SIPP will suit you if you are not a company director and you want to invest in property using your pension. Generally speaking a Property SSAS is the better option because there are less restrictions in a Property SSAS but this is only available to company directors.
Are there any drawbacks to a Property SIPP?
Only when compared to a Property SSAS but other than that a Property SIPP still gets the same tax advantages, 25% tax-free cash at age 55 and flexi-drawdown as permitted by recent pension changes. A Property SIPP is a great pension if you want to invest old pensions into property.
Do I need investment experience, sophisticated investor or high net-worth status?
Unlike a Property SSAS, a Property SIPP does require you to have particular status and investment experience. Your status will be determined by assets which will include freehold property investments, a certain level of current income or previous investment experience. If you’d like to find out if you qualify for a Property SIPP, or if you’d like to learn more please get in touch.