Self Invested Personal Pensions - Hot Topics Q&A

Q. My burning question regards SIPP funds - Are they the best way to save for your pension over and above your supperannuation contributions ?

A. Your NHS Scheme should be seen as your bricks and mortar pension. I'm not sure if you're planning to remain with the NHS. Obviously, if you're not then your future retirement benefits will reduce.

Additional funding really does depend upon your long term income objective. With many clients we calculate that with the NHS pension alone they have enough future pension income, so investing more into pensions may not be their best option (even though they'll get tax relief) as they'll be taxed on the income when they retire, as and when they draw the income. So for these clients it may be best to invest into other areas that will provide them with liquid cash as and when they need it, such as Unit Trusts etc. 

Now, to look at your question. A SIPP itself is simply a tax wrapper and not an investment itself. So, IF pensions are suitable for you, they are an option. The crucial factor is to decide on your asset allocation (how your investment is split between cash, bonds, property and shares).

If you want to go for a spread of traditional investment funds then you can also invest via a 'Wrap' provider. This is where an administration company sets up the pension, and you can choose where the money will be    invested across many different funds. You can then monitor the progress online. We use this approach for many clients' portfolios.

I know I can't give you a definitive yes or no to your question, but I hope this helps.

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