How does a SIPP work?

Описание: https://www.nutsaboutmoney.com/guide/... How does a SIPP work?

A SIPP is a type of savings account for your retirement, where the money you add is usually invested to help it grow more over time. This is similar to most pensions.

This money gets all the benefits of being inside a pension, so there’s no tax to pay as it grows and over time this can make a huge difference.

Plus, you get tax relief on the money you add from your bank. Meaning you get a 25% bonus automatically added from the government to refund the 20% tax you pay on your salary. If you pay 40% or 45% tax you can claim this back too from HMRC.

We all know the government loves to collect tax, but they have allowed pensions to have tax benefits to incentivise people to save more for their retirement.

They’ve done this so everyone isn't relying on the government when they are too old to work and currently people aren't saving enough into their pension.

Just like saving accounts, there's different types of SIPPs.

These include an expert-managed SIPP where you let the experts handle the investments, and you simply add money as and when you like. This is the best option if you aren’t experienced with investing.

They can often be called ‘robo-advisors’ although that term is fairly outdated now.

There’s also self-managed SIPP where you make your own investment decisions from a wide range of investments (such as stocks and shares and investment funds).

These are often called investment platforms.