SIPP's (Self Invested Personal Pensions)

SIPP's or Self Invested Personal Pensions allow individuals to make their own trading decisions from a range of investment types including futures, CFD's and foreign exchange trading through a range of SIPP Brokers.

SIPP's have been around since April 2006 and unlike conventional personal pensions where the pension provider controls the assets the individual can take control of their retirement plan in terms of how savings are invested and benefits paid.

Trading futures, CFD's or foreign exchange products through a SIPP allows individuals to receive tax savings associated with this product whilst taking advantage of the opportunities when trading these leveraged products.

Contributions and Tax Laws

Contributions to SIPPs are treated identically to contributions to personal pension funds although are limited to a maximum of £235,000 in any one tax year. The provider of the SIPP will claim a tax refund at the standard rate on behalf of the customer although higher rate tax payers are required to claim higher rate relief through an annual tax return.  

Once the SIPP holder reaches early retirement age (55 years old) they are eligible to take a pension from some or all of their accrued fund; up to 25% as a tax free lump sum with up to 7% of the remaining fund taken annually as taxed income from a DrawDown. Growth of the SIPP is free from Capital Gains Tax.

SIPP trading is not as popular as it was in the latter part of the last decade but it still has appeal, especially when markets become volatile and individuals look to take more control over their own investments. There are a number of SIPP providers in the UK and a few brokers that will deal directly with these SIPP providers to allow access to different types of investment products including futures, CFD's and forex.