What are SIPPs?
SIPPs “unbundled” pensions administration from investment management. For the first time pension holders were able to select a pension administrator, known as a SIPP provider, and separately appoint either a discretionary manager to run their investments or take responsibility for selecting their own investments.
There have been many changes since then, the most recent of which was “Pensions Freedom” in April 2015, explained below.
Firstly, no withdrawal limits will apply, provided investors are aged 55+ and have freedom over how they draw money from their private pensions, such as a SIPP. Secondly, the 55% pension ‘death tax’ has been abolished. From April 2015, funds left in private pensions can be passed to beneficiaries free of tax, if the pension holder dies before age 75. If death occurs age 75 or over, the beneficiaries are taxed as income on the pension funds they receive.