Pensions Put in Sipps 2

What you can put into a SIPPS pension

Fixed interest / Inflation Proofing

In addition to the usual array of cash, bond and gilt options. It is possible to add a bit of inflation-proofing to your pension with index-linked savings products from National Savings & Investments, the savings company backed by the UK Government.

Its index-linked savings bond offer a set rate of interest, plus an uplift equivalent to the Retail Price Index.

The difference inflation-proofing makes to cash savings can be quite significant.

According to research, a five year savings bond paying just 1.05% but index-linked (RPI of 3.6%), will actually pay the equivalent of 7.58% gross to a higher rate tax payer, and 5.69% gross to a basic rate tax payer.

And the usually touted drawback of restricted access (NS&I bonds lock money away for two, three, five years) is not an issue for pension savers, as pension money is locked away until at least age 55.


Only an idiot would chose to hold a residential property in their pension fund, as there is a punitive 55% tax charge.

However the Financial Services Authority says it is still possible to get exposure to residential property within a SIPP through investment in a collective vehicle, such as a offshore-listed property trust and a real estate investment trust (REIT).

Not all SIPP providers offer access to property funds however, so its important to check before signing up. Alternatively a financial adviser will be able help track down a provider which does.

For those who fancy something a little more quirky, it is possible to own a hotel room through your pension or a holiday home in France.

There are strict rules associated with holding these particular investments, most notably that if you spend time in your property you have to pay the going rent or room rate for your stay, and it is only properties bought through the official French Leaseback scheme, which qualify for UK SIPPs.


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What else you can put into a SIPPS pension

Direct property investment


Read More on Sipps Pensions

What are Sipps?

What are the rules?

The Tax Details (Yawn)

What can you put into a SIPP pension?

Benefits and advantages of Sipps Pensions

Disadvantages of Sipps

How do I get a Sipp Pension?

Will I still have to buy an annuity?

Can it help me avoid inheritance tax?

What do the experts say?