What types of pension can you transfer to the TDDI SIPP?
You can transfer any of the following types of pension into a TDDI SIPP:
Personal Pension Plans
Pensions in drawdown
Retirement Annuity Plans
Stakeholder Pension Plans
Executive Pension Plans (EPPs)
Occupational Money Purchase Plans
Small Self Administered Schemes (SSAS)
Free Standing Additional Voluntary Contributions (FSAVCs)
How do I get a pension income from the TDDI SIPP?
As you approach your retirement it can make good sense to get some impartial advice on your options. PensionWise , a service funded by the Government, can help once you reach age 50. Whether a face-to-face meeting or a telephone appointment they’ll help you understand your options.
You can also draw up to £1,500 from your pension pot (in three amounts, each of up to £500) to pay for advice.
Then, when you’re ready to start drawing on your pension, the TDDI SIPP enables you to choose from all the options introduced under the Government’s 2015 ‘pension freedoms’. You can:
- Leave your SIPP intact until you need to draw on it.
- Use all or part of it to purchase a guaranteed income via an annuity.
- Take up to 25% of your pension value tax efficiently and draw a regular income. You can do this while continuing to manage your investments; this is known as Flexi-Access.
- Take lump sums as and when you need them with 25% of each lump sum free of income tax and the remainder taxed at your prevailing rate.
- Take all your pension pot in one go with 25% free of income tax with the remainder taxed at your prevailing rate.
- Mix and match from these options to create the ideal solution , taking into account other pensions, income or savings and the amount of income you need.
Useful pension facts
You don’t need to be working to pay into the TDDI SIPP. you can contribute up to £2880 each year and the Government will top that up to £3,600 through tax relief.
Once you’ve started taking a taxable income from your SIPP you can still make contributions of up to £4,000 each year that qualify for tax relief.
If you pay more into your pension than the annual allowance, a tax charge will be applied. It’s your responsibility to declare this on your self-assessment tax return
The earliest you can take benefits from your SIPP will increase from age 55 to age 57 in 2028
If you take a large income withdrawal from your pension, you might be given an emergency tax code – you may need to claim back tax from HMRC
When you start taking your pension make sure you let us have your tax notice so we can ensure only the right amount of income tax is deducted from each payment.
If you’ve other pension schemes alongside your SIPP, remember to tell each provider within 91 days of taking income. Failure to do so can lead to a penalty charge from HMRC.
With the ability for your survivors to inherit your pension pot - a tax-efficient way to pass it on - do keep your Expression of Wishes up to date so the Trustees have an indication of how you’d like your pension fund distributed.
Frequently Asked Questions about SIPPs
A Self-Invested Personal Pension (SIPP) is a type of Defined Contribution (DC) "money purchase"pension scheme. It is an account designed to help you build a pension investment portfolio, which is then used to provide you with money when you reach retirement.
The amount of pension fund you will have at retirement will depend on how much you contribute (pay in), the time it is invested for and how well the investments have performed. The performance of investments is not guaranteed and may fall as well as rise. This means that you could get back less than you have invested.
A SIPP provides the same tax-efficient pension benefits and flexible retirement options as other types of DC pensions, but the key difference is that it offers you the freedom to make your own investment choices from a huge range of potential investments.
The SIPP account can run alongside an occupational pension scheme if you are employed and want to make additional contributions that you control, or it can serve as a standalone alternative if you are self-employed.
If you are opening your own pension there are three options available:
Stakeholder Pensions: These are typically offered by life insurance companies in accordance with minimum standards set by the government. They are the cheapest and most basic option, with low minimum contributions and capped charges. There is generally a default investment fund with only a limited range of other fund choices.
Personal Pension Plans: These are also offered by life insurance companies and will have more features. Investment choices may still be limited to a range of the insurance company’s own funds, although some have now widened the range available to include funds from other mutual fund managers. These are generally more expensive than stakeholder pensions and you will have the ability to switch between different funds should you want to.
Self-Invested Personal Pension (SIPP): A SIPP works in a similar way to a personal pension. The main difference is that they offer the most flexibility and control over the types of investments that can be held. For example, they are one of the few pensions which allow you direct access to stocks and shares, both in the UK and internationally.
We will claim the basic rate of tax relief (20%) from HMRC. This will be credited to your SIPP between 6 to 11 weeks after you have made your contribution. We usually receive tax relief on or around the 25th of the month.
If you are a higher rate tax payer you will have to claim any remainder through your tax return.
If you have any questions around your personal tax relief, please refer to the HMRC or an Independent Financial Advisor.
Regular or one-off contributions to your TD SIPP may help to increase your income at retirement and bring you closer to your retirement goals.
The annual SIPP Contribution allowance for the tax year 2017/2018 is £40,000.
You can carry forward any unused allowance from the previous 3 tax years.
If you have no UK earnings, or are earning less than £3,600 a year you can still pay contributions up to £2,880 and we will claim tax relief of £720.
The Lifetime Allowance is currently £1m.
It is not normally possible to withdraw money from a SIPP before the age of 55 (57 from 2028).
If you have reached the age of 55 and are looking to start drawing benefits from your SIPP you should read our Income Drawdown page. You may also want to speak to Pension Wise, a free government guidance service, that can give you more information about your options.
Once you have decided how you want to draw your retirement benefits you need to complete the relevant benefit form found on the Useful Forms section of our website. If you need additional information about your options or have any questions when completing the forms, you should call our customer services team on 0345 607 6001 and choose 'dealing' option, between 7.30am and 4:30pm Monday - Friday.
Our new SIPP provider, BW SIPP LLP, has administered SIPPs since 1999. Its employees are committed to providing excellent service using a breadth of administrative skills, supported by the latest technology.
Ratings specialist AKG, an independent actuarial consultancy, rate their overall financial strength as “Strong”. They have twice undergone the rigorous Investor in Customers assessment and twice been rated “Outstanding”. BW SIPP LLP is wholly owned by Barnett Waddingham.
Barnett Waddingham was founded in 1989, and has grown to become the UK’s largest independent provider of actuarial, administration and consultancy services. From small beginnings with just 20 people, it now boasts a total headcount of over 850 (including 64 partners and 97 associates) – with offices in seven locations around the UK.
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The investments made within a pension can fall as well as rise and you may end up with a fund at retirement that’s worth less than you invested. You can normally only access the money from age 55 (57 from 2028). Prior to making any decision about the suitability of a pension to meet your retirement needs, we recommend that you seek the advice of a suitably qualified financial adviser. TD Direct Investing does not provide pension advice.
The tax treatment of a SIPP depends on the individual circumstances of each customer and may be subject to change in future. If unsure about this please seek independent tax advise or speak to HMRC.