Britons are often using SIPPs to save up for their retirement as they want more flexibility in how their pensions work. In general, there is a growing awareness that the state pension will not be enough to finance a comfortable retirement, which, along with success of workplace pension auto-enrolment, is encouraging people to take control of their pension prospects, said Rajan Lakhani, a financial expert at Plum. If you're a pension saver, you can choose how much you save and how often you can contribute, or you can contribute a lump sum. The individual can choose which funds they invest in, either by themselves or through a financial advisor.
The key driver of the trend is changes to technology, as people can now manage a SIPP on their own with DIY investment apps, he said. The process of creating a SIPP depends on the provider, he said. s similar to opening up a regular investment account, but there are a few extra steps, he said. As you age, you can choose from a range of funds to invest in based on your risk tolerance.
A person can transfer over other pensions into their SIPP. Lakhani appealed for people to read the terms and conditions and legal information of a SIPP before setting up one. A SIMP retirement can encompass a variety of investments, such as listed or unlisted stocks and shares, gold bullion or commercial property.