Self-Invested Personal Pension

The Close SIPP allows you to build up a lump sum which can then be used to provide you with an income when you retire. It allows you to choose where you want your retirement savings to be invested, instead of leaving a pension company to make the decisions. You can hold a wide variety of investments in a SIPP and only eligible investments will be made available to you when investing online in a Close SIPP.

If you are a UK resident, the maximum amount of contributions on which you can obtain tax relief is the greater of £3,600 p.a. or 100% of your relevant UK earnings, subject to the Annual Allowance set by HM Revenue & Customs (currently £60,000, including both member and employer contributions across all arrangements). Where your total contributions exceed the Annual Allowance, an Annual Allowance charge may be levied on the excess.

• The value of investments can fall as well as rise and you could get back less than invested.
• Benefits due to you may be lower than you expect if growth in your investments and interest rates are lower than those shown in any illustration you receive.
• When you come to take your benefits and opt to access your pension flexibility, the higher the level of income withdrawals, the less you will have available to provide for dependants, or to buy an annuity in the future.
• Annuity rates can change substantially over short periods of time, both up and down. They could be worse when you buy an annuity than they are now.
• The tax efficient nature of registered pension schemes may change in the future.

*For a better understand of the risks involved with SIPPs, please see our Self Directed Service Key Features and Charges document.

Yes – you can open a Close SIPP to receive transfers of benefits from other pension arrangements you have. Examples of these include SIPPs, Personal or Stakeholder Plans, Occupational schemes (including EPP’s and SSAS’s) or Retirement Annuity Contracts. The Close SIPP can accept transfers in drawdown whether partially or fully crystallised. If you are looking to take an income from your Close SIPP once in drawdown, this can be accommodated. We are unable to accept transfers in from Defined Benefits Schemes or Recognised Overseas Pension Schemes (ROPS).

Although there is no limit on the level of contributions that you or your employer can make to your Close SIPP, consideration needs to be taken as to whether the contribution will qualify for tax relief purposes. Under current legislation if you are a UK resident and have UK relevant earnings, your contributions qualify for tax relief at the highest rate you pay. The maximum amount of contributions on which you can obtain tax relief in any given tax year is the greater of £3,600 and 100% of your relevant UK earnings. Total contributions for tax relief purposes are also restricted to the Annual Allowance. The Annual Allowance is an annual limit set by HMRC. The current Annual Allowance is £60,000. Where total pension contributions exceed the Annual Allowance for a tax year, an Annual Allowance charge will be charged at your marginal rate of income tax on the excess above the Annual Allowance. If you exceed the Annual Allowance, you may be able to carry forward any unused allowance from up to three previous tax years.

Contributions to the Close SIPP can be made in the form of a single one-off payment or by way of regular contributions via Direct Debit. Regular contributions can be made on any date between the 1st and 28th of the month. Member contributions should be made net of basic rate tax. Employer contributions should be paid gross. The payment must be accompanied by a Close SIPP Employer Contribution Form. No contributions are accepted after age 75.

There is no set up fee and we do not charge a fee for transfers in or contributions. However an annual administration fee applies to the Close SIPP.

You will normally be entitled to a tax free lump sum known as a Pension Commencement Lump Sum (PCLS) from the SIPP. The maximum amount that can be taken as a PCLS is 25% of the current lifetime allowance of £1,073,100 unless you hold valid LTA or PCLS protection.

The remainder of your fund after the PCLS has been paid will be used to provide you with an income either by way of Capped Drawdown or Flexi-Access Drawdown. Please note that Capped Drawdown is only available if you have accessed Capped Drawdown before 6 April 2015. Income payments from your Close SIPP will be subject to PAYE income tax. When you first start drawing an income from your Close SIPP, HMRC rules state that we must use an emergency tax code until formal notification is received from them. We will notify HMRC when you receive your first income payment from your Close SIPP and they will then advise us of the correct tax code to use for future payments.

Yes – the Close SIPP can accommodate UFPLS payments. A Close SIPP Uncrystallised Funds Pension Lump Sum Request Form will need to be completed. Once you have taken a UFPLS payment from your SIPP, the money purchase Annual Allowance Rules will then apply. The current MPAA limit is £10,000 per annum.

The first 25% of each payment is paid tax free. The remaining 75% of the payment will be subject to Income Tax at your highest rate. As above, we will use an emergency tax code until we receive formal notification from HMRC of the correct tax code to use for any future payments.

To set up a drawdown pension the fee is £50 plus VAT. A £50 plus VAT fee is charged for UFPLS payments. This is charged each time a UFPLS payment is made. The fee for reviewing income limits under Capped Drawdown is £75 plus VAT. The limits will be reviewed every 3 years for those aged 75 or under and annually after age 75. This fee is charged regardless of whether you are taking income or not from your Capped Drawdown arrangement.

Under the Close SIPP, you can nominate beneficiaries of death benefits which you would like the Trustees to consider before making any payment. This nomination can be changed at any time. On death, the beneficiary or beneficiaries can elect to:

• Take the whole of the remaining pension fund as a lump sum
• Continue taking drawdown (via Flexi-Access Drawdown)
• Purchase a lifetime annuity
• Transfer to another provider

Any combination of these options can be taken. If you are under age 75 at the date of death, no matter which option(s) is taken there will not currently be any income tax to pay as long as the funds are designated to the beneficiary or beneficiaries within two years of the date of notification of your death. These options can be taken regardless of whether the funds have been crystallised or not. If you are over age 75 at the date of death, the same options can be taken, however any payments will be taxed at the recipient’s marginal rate of tax. If on the death of a beneficiary some of the pension fund remains, this can be passed onto other beneficiaries in the same manner. The tax position will depend on the age of the beneficiary at their date of death.