Pay less Income Tax

Turn £6,000 into £10,000 - without taking any investment risk.

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.

Open an account

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. And if you are a higher rate tax payer you can claim a further £2,000 back via self assessment, turning a £6,000 contribution into a £10,000 pension fund without risking a penny
- a cool 66% return.

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

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 2011/12 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 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 tax payer 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.

The standard tax bands:

What is the annual allowance for contributions?

The annual allowance is £50,000 for 2011/12.

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 tax payers 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.

Need more information

Please refer to our Key Features document for further details

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.