Self-invested personal pension (SIPP)

What is a SIPP?

A SIPP is a self-invested personal pension. A personal pension is managed by you and/or your financial adviser, and is usually separate from your employer pension. This gives you control over your contributions as well as your investment selection. The SIPP provides you with a tax efficient way to save for your retirement.

Through the Wrap platform you can choose from a range of investments to help meet your goals. There are annual and lifetime contribution limits set by the government. We discuss this further below. The Wrap SIPP is provided by Standard Life Assurance Limited, part of the Phoenix Group.

Wrap SIPP features

• The Wrap SIPP gives you control over your investments – you can choose from a range of insured funds and a wide range of mutual funds offered on the Wrap platform which lets you tailor your investments and savings to help meet your retirement goals.
• There are no charges for buying, selling, or switching platform eligible assets in your Wrap SIPP. There are also no charges for taking drawdown or transferring to another provider as long as you do not hold any off-platform investments (OPIs). For more information on OPIs, please see below.
• The Wrap SIPP provides benefits for your beneficiaries on your death – you can nominate who you would like to receive your benefits using the Death benefits nomination form (189KB).
• You will benefit from tax relief on your contributions from the government and you can choose to make individual or employer contributions.
• You are able to make regular or lump sum payments, or a combination of both. You may also transfer existing pensions into your Wrap SIPP.
• You can opt to take drawdown from your Wrap SIPP or buy a guaranteed income for life (an annuity) when you retire.
• You also have access to Tax Free Cash (TFC) as part of your pension pot.
• If you choose to take drawdown, you will have flexible access to your pension pot. The Wrap SIPP also supports current capped drawdown arrangements.
• For more information, read our Key Features document (247KB).

Taking your pension benefits

• There are three ways you can access your pension pot in your Wrap SIPP: move into drawdown, also known as flexible income, purchase an annuity, or fully encash your benefits.
• Drawdown is a method of taking pension benefits that gives you access to your entire pension pot, however once the pot runs out, no further income can be taken.
• Drawdown gives you control of how you use your pension pot and allows you to remain invested while taking an income.
• If you choose to purchase an annuity, you will have a guaranteed income for life.
• When you take drawdown or purchase an annuity, you can normally start to access your pension monies from when you turn 55.
• You need to have a Wrap SIPP value of at least £10,000 in order to be able to start taking drawdown. There is no minimum required to purchase an annuity.
• When you move to drawdown, or before purchasing an annuity, a portion of your pension pot (usually 25%) is available to you as Tax Free Cash (TFC). You can choose to take your TFC all at once, over time, or add it to your income to reduce the tax liability on each payment.
• You can only use capped drawdown if this has been previously arranged. If you currently use capped drawdown, you can later switch to flexi-access drawdown.
• If you would like to discuss your drawdown or annuity options, please call our customer centre on 0800 085 5971. Call charges will vary.

Off-platform investments (OPIs)

• Off-platform investments, also known as external investment, are those that are not held directly on the Wrap platform. These types of investments cannot be chosen through our fund selection and are held outside the Wrap platform.
• OPIs are available for the Wrap SIPP and make up part of your pension pot. This can include physical property, off-platform discretionary fund manager portfolios, and deposit accounts.
• You can only add an OPI to your SIPP if there is a financial adviser assigned to your Wrap account. If you have removed your adviser you do not have to remove an existing OPI from your SIPP.
• There are charges for holding an OPI which are separate from your annual platform charge, as the value of your OPIs is not included in the calculation of your annual charge. Please see the charges and interest rates page for more information.

Tax information

• You will receive tax relief on your pension contributions. This means that when you pay an individual contribution, abrdn apply an uplift of 20% of the total contribution amount. So if you would like to contribute £100 per month, you will have to pay £80 and the government will provide £20 tax relief. If your employer is paying into your SIPP on your behalf, the tax relief is applied at the source, so you will see the full £100 being applied to your SIPP. Higher and additional rate taxpayers can also claim back further tax relief from HMRC. For more information, please visit the HMRC website .
• There are annual limits to how much you can contribute into your pension, and lifetime limits to how much you can withdraw, before you incur a tax charge.
• These limits are set by the government and can change over time.
• For more information about contribution limits and taxes, please see the gov.uk website.