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19 Jun 2013

More Britons Opt For Sipps As Saving Option

Taking care of their own saving plans and starting a self-managed pension is becoming a more popular option amongst UK residents.

Figures quoted by the Daily Telegraph show that the number of workers saving into self-managed pensions increased by 43% over the past two years. The most common reasons for employees deciding to take matters into their own hands are the lack of transparency in pension plans and the wide range of changes that the government has introduced to the system recently.

As life expectancy rises, more people are becoming aware of the fact that they may spend 20 or 30 years in retirement, but state pensions are not likely to allow them to live comfortably. That is why they prefer to choose more favourable terms for their savings and secure better returns for their investments.

Starting a self-invested personal pension (Sipp) is an option preferred by more than a million people. They are a simple and tax-efficient way to save, and come in different variations. Depending on personal preferences, investors can choose between savings in cash, shares and bonds, or even commercial property.

The main advantage of a Sipp over an ISA is the right to a 25% tax-free lump sum, which can be accessed at the age of 55, with the percentage rising further for higher-rate taxpayers.

The most important benefit of Sipps, however, is the fact that they give investors the freedom to decide when and how to buy and sell assets, the Daily Telegraph noted.

Copyright © M2 Bespoke 2013

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