Investing for the future can be incredibly confusing what with the ever increasing choices that are available to people nowadays, but there's one increasingly popular form of pension that is easy to understand and offers a much more open range of options: SIPPs. Standing for Self-Invested Personal Pension, it's a type of personal pension that gives you the opportunity to get great tax rebates in exchange for accessibility to your investment. It's the ideal pension solution if you're the kind of person who is happy with plenty of future planning.

What do SIPPs do differently to other schemes?
Following their introduction back in 2006, SIPPs have become increasingly popular amongst investors who like to understand where their money is going and how it works on their behalf. Elements such as a wide-ranging portfolio of shares and unit trusts are often suggested to be the best way to begin developing your SIPP. With everything from unit trusts and shares to cash and even gold being allowed into your scheme, you can already see that there are plenty of options.

While the vast majority of your assets are permitted for inclusion in a SIPP, pensions may be negatively affected by things such as residential property or 'exotic' assets. This description includes vintage cars, cellars of vintage wine, even stamp collections, and as such many pension providers will not allow their clients to incorporate them into the scheme. Their inclusion is legal, but they may attract heavy taxes, so be sure to listen to your advisor.

Three different types of SIPP: pension selection with options
The amount of control over your involvement is actually defined by your chosen SIPP; pensions are split into three different levels. First comes the Deferred type, where decisions on what investments will be made are put off until a later date as the assets are held in an insured pension fund while Hybrids provide you with a mix of a regular pension scheme and self-investment. Pure SIPPs offer the chance to invest in almost anything.; however you wish to go, the choice is entirely yours.

Investors will be allowed to draw a lump sum from their SIPP's fund the moment they reach early retirement age which (at the time of writing) is 55. Following that, the remainder must be moved into a drawdown or used to buy an annuity; again, seek advice from a professional to see which is the more suitable option for you. Of course, as always the best thing to do is consult your financial advisor and discover if SIPPs are a viable option for you.

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