What you can put into a SIPPS pension
There is an entire array of investments which qualify for inclusion within a pension structure.
However to gain access to the majority, savers will need either a Self Invested Personal Pension (SIPP) or a Small Self Administered Scheme (SSAS) .
Pension rule changes, which came into effect in April 2006, mean it is possible to include any of the following list within a pension, provided of course the pension provider you choose, chooses to offer them.
The Full list
- particular stocks and shares quoted on a recognised UK or overseas stock exchange;
- government securities (gilts);
- unit trusts;
- investment trusts;
- insurance company funds;
- traded endowment policies;
- deposit accounts with banks and building societies;
- National Savings products;
- Direct property investment
If you have a personal or stakeholder pension, it is likely that your investment choice will be restricted to a handful of funds (usually those of your pension provider).
This can have the disadvantage for those who want to invest in a particular area/sector, but know the fund managed in that area/sector, by their provider, is a poor performer.
Even when a personal pension provider offers what is known in financial jargon as “open-architecture” the fund of your choice may not be on offer.
Using a SIPP provider will dramatically increase the number of investment funds on offer.
To find a good SIPP provider ask an IFA
Some pension providers allow investors to incorporate exposure to commodities with in their pension fund, via exchange traded funds.
Exchange traded funds
These basically track an index – in much the same way as a unit trust but as shares rather than units.
There is a cost saving for investors to using ETFs.
The average UK tracker fund has an annual management fee of around 1% compared to just 0.3% for the equivalent ETFs.
Of course, private bankers and discretionary fund managers have long used commodities within client portfolios for protection, because they are believed to be negatively correlated to equities.
The arrival of exchange traded commodity funds into the UK in recent years, means that now retail investors can get exposure to these assets themselves.
It is possible to track, gold, oil, wheat and much more through these funds. More information on ETFs and your general pension requirements are best obtained through a reputable IFA. To link to one via us please click here
What else you can put into a SIPPS pension