What is SIPP?

Did you know that you can now fund your purchase on specifically Sipp approved property developments entirely through your pension using a SIPP (Self Invested Personal Pension) or FPT (Family Pension Trust) Or, If you are investing in one of our sipp approved properties solely on a ‘buy to rent’ basis, and do not intend to use the accommodation for your personal use, it is classed as a commercial property, and as such could be included in a Self Invested Personal Pension (SIPP) (Terms & Conditions apply).

This not only offers incredible tax advantages but also puts you in control of how your pension is invested for your future.

And the process is much easier than you may think! We currently have amazing SIPP Approved Developments in two wonderful locations (Caribbean and Cape Verde) and have partnered with pension and investment experts to give you the independent professional advice you need to help guide you through your options. They will deal with transferring any “frozen” pensions from previous employment or businesses and/or funds from other personal pensions. All you have to do is select the property you want in your pension fund.

Aside from any contributions made by you or your employer, SIPP’s are also able to accept transfers in from other pension schemes and/or arrange borrowing of up to 50% of the fund value. This can be particularly attractive when acquiring property where there are insufficient funds.

All monies invested into your fund grow free of capital gains tax and income tax and the contributions you make are enhanced by income tax relief at source.

Contributions into a SIPP attract relief at an individual’s highest rate of tax. So, for a higher rate taxpayer, putting £60,000 into their fund would give buying power of £100,000 to invest in a prime resort property.

It is also possible to borrow additional funds against the value of your SIPP or FPT. As much as 50% of the value of a SIPP/FPT can be borrowed to increase the overall fund for property investment. So, as an example, a fund that has a value of £150,000 can be increased by 50% or £75,000 to make a total fund of £225,000 available to invest in property.

To find out more about investing in property through a Self Invested Personal Pension or Family Pension Trust contact The OPSI Group on 0845 519 2312.

Pension contributions enjoy generous tax relief and should form part of your tax planning, but it is an area of constant change. If you are interested in learning more about SIPPs, we can recommend an independent financial adviser to give you specific up to date information and an initial assessment at no cost to you.

For more information on your current pension arrangements etc follow this link
https://secureonline.dwp.gov.uk/tps-directgov/en/contact-tps/pension-tracing-form.asp

Britons face £50,000 gap in their pensions.

Britons are facing a £1.2 trillion pensions gap between what they think their retirement income will be and how much they will actually receive.
The average person needs to save £50,000 more during their working life than they currently plan to in order to obtain the pension they want, according to consultancy firm Hewitt Associates.

The group found that the average worker, who was aged 43 and earned £25,000 hoped to retire at 63 on a pension worth £15,300 a year. But they are saving only 5.9% of their salary into a defined contribution pension each year in order to achieve this, meaning their pension is actually likely to be worth only around £5,900 annually in real terms.

Even once the state pension is factored in, people would still need to continue working until they were 70 or increase their pension contributions to more than 19% of their pay in order to receive their desired retirement income. The group said that the gap between the pension that people hoped to receive and its projected size had soared by 50% in the past
six years, with Britons facing a shortfall of £800 billion when the same research was carried out in 2004.

Lynda Whitney, Pension Consultant at Hewitt Associates, said:
"Saving for retirement is a major issue and one of the largest socio-economic problems to be faced by the new Government .
"This saving gap cannot be met through higher state benefits funded by taxing future generations as the proportion of pensioners is increasing relative to the working population. "People need to wake up to the fact that they will have to save more, work longer and or live on a lower pension in retirement."
But when told about the shortfall they faced, only 10% of people where prepared to retire on less than they had hoped, while just 27% said they would increase their contributions.
The research also found that 43% of people are not members of an employer - sponsored pension scheme, with 40% of people relying solely on the state pension to provide them with a retirement income.
YouGov questioned 1,691 people between March 30 and April 1.

Source: Western Mail.