Frequently Asked Questions
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- SIPPs
- SSAS
A SIPP is a “do-it-yourself” pension: a tax-advantaged wrapper in which you choose the investments (shares, funds, even commercial property) rather than being limited to an insurance company’s fund range. Tax relief on contributions and tax-free growth work exactly as in any other UK registered pension.
A SIPP often suits investors who want greater investment choice, company directors and business owners, people consolidating several old pensions under one strategy, and experienced investors, particularly those working with a financial adviser. If you simply want a low-cost, hands-off pension, a standard personal or workplace pension may serve you better.
Contributions receive tax relief at your marginal rate: basic-rate relief of 20% is added automatically, and higher and additional-rate taxpayers can reclaim a further 20% to 25% through self-assessment. You can contribute up to 100% of your earnings each year, capped by the £60,000 annual allowance (lower for very high earners and for anyone who has flexibly accessed a pension).
Yes. Offices, shops, industrial units and land can be held in a SIPP, and many providers permit borrowing of up to 50% of the scheme’s net assets to help fund a purchase. Business owners often hold their own trading premises this way, with rent paid by the business growing the pension tax-efficiently. Residential property is not normally permitted.
Normally from age 55, rising to 57 on 6 April 2028. Up to 25% can usually be taken tax free (capped at the £268,275 Lump Sum Allowance), with the balance taxed as income when you draw it, whether through flexi-access drawdown, an annuity, lump sums or a combination.
Usually, yes. Consolidating old workplace and personal pensions into one SIPP is one of the most common reasons to open one. However, some older schemes carry exit fees or valuable guarantees (particularly defined benefit pensions) that would be lost on transfer, so always take advice before moving a pension.
A SIPP is an individual personal pension. A SSAS is an occupational scheme established by a limited company for up to 11 members (usually directors and family) who act as trustees together. A SSAS can lend up to 50% of its assets to the sponsoring company, which a SIPP cannot do. See our dedicated SSAS page for full details.
No. A SIPP’s wider investment choice can come with higher charges, and the investment risk sits with you. It tends to reward people who will genuinely use the flexibility; for straightforward needs, a standard personal pension is often better value. Independent advice will establish which suits your circumstances.
A SSAS is an occupational pension scheme established by a limited company, typically for its directors and senior employees, with a maximum of 11 members. The members are normally also the trustees, giving them collective control over how the scheme’s assets are invested, including options unavailable to other pensions such as lending to the sponsoring company.
A SIPP is an individual personal pension. A SSAS is a company-sponsored scheme whose members act as trustees together. The key practical differences: a SSAS can lend up to 50% of its assets to the sponsoring company and pools members’ funds for larger investments, but it costs more to administer and decisions are made jointly.
Yes, up to 50% of the scheme’s net assets, provided HMRC’s conditions are met: a first legal charge over an asset of sufficient value, a commercial interest rate of at least 1% above average bank base rates, equal capital-and-interest repayments, and a maximum five-year term. Loans that breach these rules trigger substantial tax charges, so professional structuring is essential.
Yes. A SSAS can purchase commercial property from a connected party, including the sponsoring company or its directors, provided the transaction is at an independently verified market value. This can release capital into the business while securing the premises within the pension.
Up to 11. Most schemes consist of company directors and their family members, with all members usually acting as trustees. This pooling of funds and control is why SSASs are often used as multi-generational “family pensions”.
A SSAS involves meaningful set-up and annual administration costs, typically justified only where combined member funds are around £200,000 or more, or where you will genuinely use the loanback or property features. We set out the full costs before you commit, and will tell you honestly if a SIPP would serve you better.
There is no legal requirement to appoint one, but every SSAS must be registered with HMRC and comply with pension legislation, and trustees are personally responsible for the scheme. Most schemes appoint a professional administrator to handle registration, reporting and compliance. We can arrange and coordinate this as part of our advice.
From 6 April 2027, unused pension funds (including SSAS funds) will normally count towards a deceased member’s estate for inheritance tax, with exemptions for spouses and civil partners. Trustees and members should review death benefit nominations, scheme funding and withdrawal strategy ahead of the change.
It depends on your intended lifestyle. As a benchmark, the PLSA Retirement Living Standards suggest a single person needs roughly £13,000 to £14,000 a year for a minimum lifestyle and around £44,000 for a comfortable one, excluding housing costs. The State Pension provides £12,547.60 a year (2026/27); your pensions and investments need to fund the gap. A planning review models your personal number.
Establish what retirement will cost, value everything you will have, and test the two against each other year by year with realistic assumptions for inflation, returns and lifespan. A good plan is also stress-tested against early market falls and a long life. This is the cash-flow modelling we build for every retirement planning client.
Often, but not always. Consolidation can cut charges and simplify your strategy, but some older schemes carry valuable benefits that are lost on transfer, such as guaranteed annuity rates or protected tax-free cash. Always have each pension reviewed before moving it; we will tell you plainly if one is better left where it is.
Neither is universally better. Drawdown is flexible and stays invested but carries risk; an annuity guarantees income for life but is irreversible. Annuity rates have improved substantially in recent years, and many clients now blend the two: an annuity for essential bills, drawdown for flexibility. Health conditions can secure you an enhanced annuity rate, so whole-of-market advice matters.
Only with a purpose for it. Withdrawn cash loses tax-free growth, and from April 2027 it sits inside your estate for inheritance tax. Taking it in stages to supplement income is often more efficient than taking it all at once. Model the options before making an irreversible decision.
Earlier than feels necessary: compound growth and tax relief reward time. But planning adds value at any stage, and in the final years before retirement the difference between a well-structured and poorly-structured income strategy can be worth thousands of pounds a year.
Normally 25% of your pot can be taken tax free, up to the £268,275 Lump Sum Allowance. The rest is taxed as income at your marginal rate in the year you withdraw it, so spreading withdrawals across tax years often saves significant tax.
Remaining pension funds pass to your beneficiaries: tax free if you die before 75, taxed as their income if after. From 6 April 2027, unused pension funds will also normally count towards inheritance tax, with exemptions for spouses and civil partners. Reviewing your nominations and withdrawal strategy ahead of this change is strongly advisable.
Normally from age 55, rising to 57 on 6 April 2028. Offers to “unlock” your pension earlier are almost always scams. You do not have to take anything at 55; leaving the fund invested is often tax-efficient.
Yes, but once you take taxable income flexibly, the Money Purchase Annual Allowance limits money purchase contributions to £10,000 a year. Taking only tax-free cash does not trigger it.
Generally no. Beyond the short statutory cancellation period, a lifetime annuity is permanent, which is why we compare the whole market and model the alternatives before you commit.
Neither is universally better. Drawdown offers flexibility, continued investment and death benefits but no guarantees; an annuity guarantees income for life but is inflexible. Improved annuity rates mean a blend of the two now suits many retirees.
We would typically recommend a minimum investment (across investment & pensions) of £100,000. Though we assess each enquiry on a case-by-case basis.
In practice, wealth management is investment advice with ongoing portfolio care at its core: your adviser recommends how your money should be invested, reviews it with you regularly, and plans the surrounding tax, pension and estate issues. At SIP Wealth Management the same adviser handles all of it, and nothing changes in your portfolio without your agreement.
Investments themselves can fall in value and that risk is not insurable. However, as clients of an FCA-regulated firm, eligible investors are covered by the Financial Services Compensation Scheme, which protects up to £120,000 per person per authorised firm if a regulated firm fails. This is protection against firm failure, not against market movements.
It depends on when you need access and your tax position. Pensions usually win on pure tax efficiency because of upfront tax relief, but the money is locked away until at least age 55 (57 from 2028). ISAs offer full flexibility with tax-free growth. Most long-term plans use both; we model the right order for you.
Both, where each earns its place. Passive funds provide low-cost market exposure; active managers are used where we believe they justify their fees. Our fund selection and monitoring process reviews this continuously.
Formally at least once a year, with a written report, plus rebalancing recommendations and contact whenever markets or legislation make a change advisable. You can speak to your adviser at any time.
A good adviser follows a documented process rather than personal judgement alone. At SIP Wealth Management that means establishing your risk profile and capacity for loss, matching you to a strategic asset allocation, selecting funds through independent research, and reviewing the portfolio continuously. You see the reasoning behind every recommendation, and nothing is invested without your agreement.
A model portfolio is a researched, ready-made blend of funds built to match a defined risk level, which the adviser then applies to your account. It brings consistency and continuous monitoring that would be impractical to deliver bespoke for every client, while still being tailored through your risk profile and tax wrappers.
Two things: how much short-term volatility you can emotionally tolerate without abandoning your plan, and your capacity for loss, meaning how much your lifestyle could absorb financially. Both feed into which of the five portfolios is suitable for you. They are reassessed at every review, because circumstances change.
Because broad market movements dwarf the differences between similar funds. Landmark studies attribute around 90% of the variability of a portfolio’s returns over time to its asset allocation, the split between asset classes, which is why we set that split deliberately and police drift from it, rather than chasing last year’s best fund.
Selling a little of what has grown and topping up what has lagged, returning the portfolio to its target allocation. It keeps your risk level constant and imposes a disciplined pattern of taking profits high and buying low. We recommend rebalancing whenever your portfolio drifts materially from target.
Yes. Ask us for the latest portfolio factsheets and annual performance reports and we will talk you through them. Past performance is not a guide to future returns.
Ethical investing is values-led: excluding or selecting investments to match your principles. ESG is an analytical framework that scores companies on environmental, social and governance factors, often used to manage risk as much as to express values. Most modern “ethical” funds use both, which is why understanding what a fund actually does matters more than its label.
There is no consistent evidence that ethical investing must underperform. Because ethical portfolios tilt away from sectors like oil and tobacco and towards others like technology and healthcare, their returns differ from mainstream benchmarks year to year, sometimes ahead and sometimes behind. We match ethical portfolios to your risk profile exactly as we would any other.
No. Our ethical portfolios are built at the same five risk levels as our core range, from Cautious to Adventurous, using the same asset allocation discipline. Your risk profile is set first; your values then shape which investments fill it.
Yes, and many clients start this way: for example, an ethical ISA alongside an existing pension portfolio. We will structure it so the overall blend still matches your risk profile and financial goals.
Look at what it holds, not what its marketing says. The FCA’s sustainability labelling rules now restrict how UK funds can describe themselves, which helps, but the reliable test remains the underlying holdings, the screening methodology and the manager’s voting record. Reviewing exactly this is part of our fund selection process.
No. Our ethical portfolios are built at the same five risk levels as our core range, from Cautious to Adventurous, using the same asset allocation discipline. Your risk profile is set first; your values then shape which investments fill it.
A common starting point is enough to clear your mortgage and debts plus a multiple of the income your family would lose, minus cover you already have such as death-in-service benefits. The right figure depends on your dependants, their ages and your existing savings, so we calculate it properly rather than guessing.
Traditionally, assurance covered an event certain to happen (death, under a whole of life policy) while insurance covered an event that might happen (death within a set term). Today the terms are used interchangeably; what matters is choosing the right type of policy for your needs.
Usually, yes. A policy in trust pays your beneficiaries directly, typically faster than probate, and the payout normally sits outside your estate for inheritance tax. It usually costs nothing to set up, and we include it in our advice as standard where appropriate.
Often, yes. Death-in-service typically pays around four times salary, which may fall short of clearing a mortgage and supporting a family, and the cover ends when you leave the job. We treat it as part of your cover, not the whole answer.
Yes. Premiums are based on your age, health and lifestyle when you apply, which is why cover is cheapest to arrange early. Existing policies keep their original premium basis, which is another reason not to cancel old cover without advice.
Critical illness cover pays a one-off lump sum if you are diagnosed with a specified serious condition. Income protection pays a regular, tax-free income for any illness or injury that stops you working, for as long as needed within the policy term. They solve different problems, and many families benefit from both.
Typically 50% to 65% of your gross earnings, paid monthly and tax-free. Because payments are tax-free and your outgoings usually fall while off work, this level generally maintains a liveable income. You choose the amount of cover, within the insurer’s limits, when you apply.
Yes, and it is arguably more important for you than for anyone employed, because there is no employer sick pay to fall back on. Insurers assess your earnings through your accounts or tax returns, and cover is based on your trading income. We advise self-employed clients on this regularly.
Standard long-term income protection covers illness and injury only. Unemployment cover exists as a short-term add-on, typically paying out for up to 12 months, and comes with strict eligibility conditions. We will tell you honestly whether it is worth adding in your circumstances.
Match it to how long you could cope without the policy: your sick pay entitlement if employed, or your emergency fund if self-employed. Extending the deferred period from 4 weeks to 13 or 26 weeks can cut premiums substantially, which often makes better cover affordable.
It is the definition of incapacity the insurer uses. An own-occupation policy pays if illness or injury stops you doing your own job; an “any occupation” policy pays only if you cannot do any work at all, a far harder test to meet. Own-occupation cover is the standard we recommend wherever available.
Savings buy you time; income protection buys you as long as it takes. A healthy emergency fund might cover six months, but a serious illness can keep you off work for years, and long-term claims average measured in years rather than months. Many clients use savings to justify a longer deferred period, cutting the premium while keeping the long-term protection.