Self-invested personal pension (SIPP) FAQs

You will be able to pay the equivalent of a year's salary (up to a maximum of £235,000 for 2008/09) into your pension each year and receive tax relief on it. Each individual has a lifetime allowance for total contributions to pensions for 2008/09 which is £1,650,000. This will rise each year until it reaches £1.8 million in 2010; after that, it will be reviewed every five years.
Generally, any pension fund that exceeds the lifetime allowance for that particular year will be subject to the lifetime allowance charge (there are transitional provisions as well which relate to pension rights in existence on 6 April 2006).

• If you take benefits above your lifetime allowance as a pension, the lifetime allowance charge on the excess amount will be 25%.
• If you take benefits above your lifetime allowance as a lump sum, the lifetime allowance charge on the excess amount will be 55%.

The SIPP administrator can claim basic rate tax relief at 20% to a maximum of £47,000 in 2008/2009 based on the £235,000 threshold. The investor's net contribution would be £188,000 if he/she is a basic rate tax-payer.
Higher rate tax-payers will still be able to claim an additional 20% tax relief as the 40% taxation rate hasn't changed. So, the SIPP administrator would be able to claim up to another £47,000, taking the net contribution for a higher rate tax-payer (after reclaiming tax) to £141,000. The value of tax savings and eligibility to invest in a SIPP will depend on individual circumstances and all tax rules may change in the future.

Yes. You can hold SIPPs alongside other personal and occupational schemes.

Yes. Someone who earns over £30,000 and has a company pension scheme is no longer barred from having a private pension as well.

It will be possible to take 25% of any pensions saving as a tax-free lump sum.

 The Fidelity Personal Pension allows this. If you also have a company pension, you may be able to start drawing this too and carry on working, even with the same employer, providing the scheme allows it.

 If you have an existing regular payments plan, you can change your contribution by calling 0800 085 0923. If you want to make a single contribution, just complete this form (PDF).

 

Either call us on  0800 085 0923 or send your instructions to Fidelity International, PO Box 80, Tonbridge, Kent, TN11 9YA.

Order your Fidelity Personal Pension and retirement brochures to find out how you can use SIPPs and ISAs to save for retirement.

The Fidelity Personal Pension information pack contains detailed information about the SIPP and an application form. If you decide to open a SIPP, just complete and sign the application and confirmation forms, then return them with any payment in the prepaid envelope provided. If you have any questions or need help completing the form, please call us on 0800 085 0923.

The Fidelity Personal Pension will take transfers of £10,000 or more from: other SIPPs, personal pension plans, stakeholder pensions, Free-Standing Additional Voluntary Contribution plans (FSAVCs). Please note that we cannot accept transfers from any sort of occupational pension scheme or from a pension on which income drawdown has already been arranged.

You can include any of over 1,100 funds from over 60 fund companies on FundsNetwork; Standard Life Investment Policy Funds and the SIPP bank account.
If you want to invest directly in stocks and shares, in commercial property or use discretionary fund managers, you cannot do this within the Fidelity Personal Pension as it is only a streamlined version of the FundsNetwork SIPP. These options are available through the full FundsNetwork SIPP, however you must arrange this through a financial adviser due to the complex nature of these investments and additional charges will apply.

If you want to include these types of investments at a later stage that’s fine, but it will mean that you no longer qualify for the terms of the Fidelity Personal Pension.

 If you die before taking benefits, the money will usually be paid out as a lump sum to your nominated beneficiaries. They will not normally have to pay inheritance tax on money received from your SIPP (although it will be subject to 35% tax). Once you have used all the money from your SIPP to buy an annuity, your retirement savings cannot be left to your dependants. So, if you die, the only money that will pass to your beneficiaries is any benefit that is guaranteed.