Self-Invested Personal Pension (SIPP)
A SIPP (Self-Invested Personal Pension) is a type of personal pension plan in the UK that allows the holder to choose and manage their own investments within a pension wrapper. SIPPs are designed to give individuals more control and flexibility over their pension savings, as they are able to choose from a wide range of investment options, including stocks, bonds, mutual funds, and exchange-traded funds (ETFs).
SIPPs are similar to other types of personal pension plans, such as defined contribution pension plans, in that they are funded by contributions made by the individual or their employer. However, SIPPs offer more control and flexibility over the investments within the pension fund, as the individual is able to make their own investment decisions rather than relying on a pre-determined investment strategy.
SIPPs are a popular choice for people who want to take a more active role in managing their pension savings and who have the knowledge and expertise to do so. However, it’s important to note that SIPPs carry investment risk, as the value of the investments within the pension fund may fluctuate and may not perform as well as expected. As with any pension plan, it’s important to carefully consider the risks and potential rewards before deciding whether a SIPP is right for you.