Take Control of Your Pension

On this page, you will find all the information you need to understand the principles of the tax-efficient Self Invested Personal Pension - or SIPP - and open a SIPP Account.

A SIPP lets you pool existing investments, including old company pensions you may have collected through your career, and aggregate them in a single place. You can then become your own pension manager, choosing what to buy and sell and when, in a low-charge environment.

Our SIPP Account is very competitive at just £10 per month and with the cost of investing so low here at Interactive Investor and the quality of information and tools so high, we provide you with a compelling environment to manage your retirement portfolio. 

What is a SIPP?

A SIPP (Self Invested Personal Pension) is a tax-efficient pensions account where you can hold investments in shares, funds and cash (thus sheltering them from tax); with the added advantage of tax relief on your contributions.

Our SIPP Account benefits (as part of your Interactive Investor Account):

• Hold funds, shares, investment trusts, ETFs cash and bonds
• No set-up fees for new accounts
• Administration fee of just £10 per month (plus VAT)
• Over 2,800 funds, over 90 fund managers
• All initial fund charges at 0%
• Commission costs from just £1.50 in shares

Full details of our SIPP charges

Open an Account

SIPP Account – the details

How do I do it?

Contribute to your pension: Pay £8,000 into your SIPP and the Inland Revenue will automatically rebate £2,000 back to your account. If you’re a higher rate tax-payer and your top rate of tax is 40% you will be able to claim back a further £2,000 via self-assessment, turning a £6,000 contribution into a £10,000 pension fund. And if you are an additional rate taxpayer and pay tax at a rate of 50% you can claim £3,000 back via self assessment, turning a £5,000 contribution into a £10,000 pension fund without risking a penny - a cool 100% return.

Tell me more about SIPP tax relief

All eligible pension contributions automatically qualify for basic-rate tax relief:

• If you have UK earnings, then you can contribute your entire income into your SIPP (subject to a 2012/2013 cap of £50,000). You will qualify for basic-rate tax relief automatically and for higher-rate tax relief on that portion of your income that attracts a higher tax rate. Please note: Higher earners may be subject to limits on the higher-rate tax relief available.
• If you do not have any UK earnings you can still pay a net contribution of £2,880 a year into your SIPP and receive basic-rate tax relief of £720, which will bring your overall investment up to £3,600. You can also set up a SIPP for a child or spouse and pay the contributions on their behalf up to these limits.

How much tax relief will I be entitled to?

The amount of tax relief you will be entitled to will depend on your individual circumstances and most importantly, whether you are a higher-rate taxpayer or not.

Tax band explanations

An individual with no other allowances would start to pay higher rate tax over an income of £42,475 (calculated as your personal allowance plus the point at which the higher-rate tax band applies). Income received over this figure would be eligible for higher-rate tax relief if you decided to invest in a pension.

What is the annual allowance for contributions?

The annual allowance is £50,000 for 2012/2013.

The annual allowance is currently expected to stay at £50,000 until 2015/2016, but this is not guaranteed.

All your pension contributions, up to the annual allowance, qualify for basic-rate tax relief. Any contribution is net of basic rate tax: if you were to invest £800, an additional £200 would be collected automatically from the Inland Revenue on your behalf, added to your account, and be available to invest 6 to 11 weeks later. Higher-rate taxpayers making contributions on their own behalf can reclaim a further tax relief through their self-assessment forms.

Please note: Higher earners may be subject to limits on higher-rate tax relief available.

Useful information

To open a SIPP account, first you need to apply for our Investment account. Once your account is up and running (applying only takes a few minutes) you can add a SIPP account online.

In order to apply for a Investment account please follow the steps below:

1. Firstly, you need to open an account
2. If you haven’t already done so, you’ll need to register with Interactive Investor
3. Complete the application process. As long as we can verify your information online, your account should be up and running straightaway.

Once your account is open and fully active you will be able to add a SIPP account. To do this, got to the Account Admin section of your account and select the Add Account option.

Your SIPP account will be confirmed within 72 hours by our SIPP team.

SIPP Forms

Here, you'll find all the forms you will need to manage your SIPP account:

Transfer form
Contribution form
Direct Debit mandate form
Expressions of wish form
Expressions of wish – post drawdown (please use this form if you are over the age of 75, or if you are currently in drawdown)

Key Features

View the key features of an Interactive Investor SIPP, together with its benefits and risks.

• Read the key features document

SIPP terms and conditions

• Read the SIPP Scheme terms and conditions
• Read the Trading Service terms and conditions

Please be aware that tax laws may change. A SIPP may not suit your individual circumstances and you may want to consult a financial adviser. Please be aware of the risks involved.

Please be aware that tax laws may change.

If you need independent financial advice, visit our partners at www.ifa.net, or call 0845 257 2507.