Since the 1995 Finance Act there has been quite a revolution in the personal pensions market which has manifested itself in a surge of interest in Self Invested Personal Pensions (SIPPs). SIPPs provide an individually managed pot into which to make eligible annual pension contributions. They are, potentially, extremely attractive to people who are dissatisfied with the ‘take it or leave it’ approach to pension provision and would like to be able to control and add value to their pension arrangements.

BAM specialises in the investment management of SIPP portfolios. It does not give pensions advice and therefore there is no conflict of interest.

The advantages

flexibility - SIPPs offer a wide range of investment options and can adapt, thus removing the need to change the pensions vehicle if circumstances change;
investment freedom - you are not restricted to the insurance funds of one provider - many investments are permitted from securities to commercial land and property;
transparency - charges are justifiable and transparent;
favourable tax treatment - tax-free contributions, tax-free fund build up, tax-free death benefit distribution, tax-free cash up to 25% of fund;
income drawdown - income can be taken from age 50 and an annuity need not be purchased until age 75 with the investment funds continuing to grow in the meantime;
specialist advice - you have the freedom to appoint (and if necessary change) your own specialist pensions adviser and investment manager.

Persons for whom SIPPs may be suitable

Any individual under 75 with sufficient relevant earnings who likes to control their affairs and understands the value of specialist advice. SIPPs may be of particular interest to Company Directors, Partners and the Self Employed, and Corporation of Lloyd’s Names.

Typical costs

Pensions Adviser - one-off fee and/or 0.5% p.a.

Pension Trustee - c. £1000 take-on and c. £500 p.a.

Investment Manager - 0.5% p.a. & Investment Administration - 0.25% p.a.

How does it all work?

·   Your personal specialist Pensions Adviser (IFA) will be responsible for providing initial and on-going advice on SIPPs and any other pension arrangements.

·   If a SIPP is suitable to your circumstances  your Pensions Adviser will recommend a Pensions Trustee who will deal with all aspects of your pension’s administration and provide regular updates of the progress of your pension.

·   You appoint your own specialist Investment Manager (BAM) who will be responsible for the initial selection and subsequent trading activity of the investment portfolio.

·   The Investment Administrator (e.g. Adam & Company) will provide all transaction and record keeping functions together with tax reclamation and regular valuations.

For further information please contact:

Hugo Pring

    Phone:      015242 72941
    Email:       hugo.pring@borderam.com