Some people don’t want a pension company deciding how their pension savings are invested – they want to control where their money goes and how it grows. For people wanting to have autonomy to make their own investment decisions with their retirement savings, a Self-Invested Personal Pension (SIPP) may be an alternative solution.
Inflation set to erode Britain’s £60 billion cash savings
Millions of Britons could see their savings shrink, as they don’t know how to shield them from the threat of rising inflation. Currently, UK savers are hoarding over £60 billion[1] in cash for long-term savings and investments, which stands to be eroded by £1.5 billion this year as a result of higher inflation.
In the previous five years, buy-to-let has seen the impact of huge property price increases. THERE HAVE BEEN legislative changes, new tax treatment and deep economic uncertainty across the country.
The Bank of Mum and Dad is potentially the UK’s most lenient lender. its relaxed approach means it ends up writing off huge numbers of loans each year, according to new research[1].
You’ve worked hard for your money – now investing can get your money working harder for you
Before investing, you need to decide how much risk you are willing to take and consider your ability to deal with any losses. Some investors are happy to take higher risk if there is a chance for higher returns over the longer term, while others don’t want to accept any risk. Others may sit somewhere in the middle. The value of investments can go down as well as up, and so there is always a risk that you may not get back the amount you put in.
Convenience rather than cash is the biggest motivation
There are plenty of reasons why moving into a smaller home makes sense, and more than 3.9 million over-55 ‘empty-nesters’ approaching retirement are planning to downsize to a cheaper property later in life[1] – but it is convenience rather than the cash that is their biggest motivation.
Whatever you’re putting money aside for, there’s likely to be a role for Individual Saving Accounts (or ‘ISAs’). Low interest rates on cash savings since the financial crisis have meant that many savers have turned to the markets in the hope of achieving a better return.
Access to health and well-being support in the workplace
There is now a clear trend of people working for longer and delaying their retirement. Although some are staying in work out of financial necessity, others want to keep working because they value the mental and social stimulation their job brings.
If you die, your Self-Invested Personal Pension benefits will be paid to your beneficiaries – either as a lump sum or an ongoing pension. You’ll need to complete a nomination form declaring who you want the payments to go to. The tax treatment of any death benefits paid from your SIPP will depend on your circumstances.
One-time purchase that affects your whole retirement
Due to the current economic climate, it has never been more important to make the correct decisions when deciding how to invest a retirement fund. If you decide an annuity is right for you, it’s important to shop around. It’s a one-time purchase that affects your whole retirement, and you cannot change your mind later on.
