What is a Self-Invested Personal Pension (SIPP)?
A Self-Invested Personal Pension is a Government-approved Personal Pension scheme, which allows you to choose how your pension contributions are invested.
How much can I contribute to a SIPP?
There is currently a SIPP contribution Annual Allowance of £40,000 per tax year and that’s including any tax relief you may receive on your contribution; you can contribute an amount equal to the level of your earnings, capped at £40,000. Contributions to an evestor Pension can be through an initial investment, a monthly contribution, or both. There are instances where you can invest more than £40,000 by utilising previous years’ allowances. Your annual allowance is also determined by your annual income that qualifies as UK relevant earnings. If you are unsure what this figure is, please contact our support team for further information.
When can I access my evestor SIPP?
Under current government legislation, you can commence drawing your SIPP contributions (drawdown) from the age of 55, or younger if suffering from a very serious illness.
We don’t currently support drawdown at evestor, but it is something we are looking to facilitate in the future. For now, if you are looking to drawdown, you will need to transfer to a new provider.
What is pension tax relief?
When you invest in a SIPP you will receive tax relief from the government based upon your taxable income. Tax relief is essentially the government giving you back the tax you paid on that monetary contribution. Basic, higher and additional rate taxpayers will all receive a matched contribution of 20% which is collected from the HRMC by evestor.
For example, if you’re a basic rate tax payer you would be taxed £20 on the £100 that you earned (on earnings over your personal allowance), leaving you with £80 net. If you take that £80 and contribute it towards your SIPP, evestor will reclaim the £20 tax from HRMC on your behalf, thus making your gross contribution £100. If you are a higher or an additional rate tax payer, you will need to complete and return a self-assessment tax return to receive the additional 20% and 25% respectively.
When will tax relief be applied to my account?
Our administration team will be in touch with HMRC to apply for the tax relief once any contribution has been accepted. It can take up to 6 weeks to receive this. Money is then credited to your account and invested the following working day.
Still got questions?
We're always happy to help, if you can't find an answer to your question you can speak to one of our dedicated support specialists via webchat.