Available Options For SIPP Investments

Those who are of retirement age or near retirement age are most certainly concerned with their ability to manage their later years on a small and limited income. While general pension plans allow for a certain flexibility in controlling and using funds, they can be somewhat restrictive as to investing.

The Self Invested Pension Plan (SIPP) provides a much greater selection of allowable investments for those pensioners who prefer more freedom in managing their funds. The Revenue allows investment in many categories at a much lower tax rate, providing even more funds to be put away for that rainy day.

These SIPP investments fall into various categories, including stock trading, commercial property investments, company funds, and certain types of bank accounts. Unlike managed pension schemes where investments are controlled by the pension company and its agents, SIPP investments allow the investor to be their own fund manager. It should be noted, however, that this does increase the responsibility for the investor as to the maintenance and tracking of their own funds.

Another quite attractive benefit of this type of scheme is that the funds that are available to be withdrawn can be seen as a regular income. A sum of cash equal to 25% of non-invested funds can be withdrawn at once, with the remainder available to be used as an income in regular payments. This form of income is subject to taxation as would be any income earned in the workplace.

Property investments generally fall into the category of commercial interests. Those properties that are considered to be residential in nature are still allowed by the Revenue, yet they will be subject to higher taxation of up to 55%. This rate also applies to assets that are known to be "pride in possession" properties, such as antiques, artwork, and collectible autos.

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