A Self Invested Personal Pension (SIPP)
is a type of personal pension
plan. It works in the same way for contributions, tax relief and
eligibility. However the main difference is that the SIPP has
a more flexible approach to investments.
A conventional personal pension generally involves the plan
holder paying money to an insurance company for investment in an
insurance policy. This means the money is invested with
relatively little choice or freedom from the plan holder.
A SIPP allows the plan holder much greater freedom in what to
invest in and for the plan to hold these investments
directly. The plan holder can have control over the
investment strategy or can appoint a fund manager or stockbroker to
manage the investments.
For SIPP contracts written under trust, the trustee controls the
investment under instruction from the member. It is possible
for the plan holder to be the trustee. If this is the case,
an approved administrator must be appointed to carry out investment
transactions.
Click here for general
information about personal pension plans and how they work.
