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SIPP - Frequently asked questions

Here we seek to address some frequently asked questions about the Vantage SIPP. If you're unable to find what you're looking for, please don't hesitate to phone us on 0117 980 9926 or email us.

Applying

  • What are the differences between a SIPP and a stakeholder pension?

    Both schemes are Personal Pension Plans and governed by the same contribution allowance and tax relief rules.

    Stakeholder pensions were introduced with simplicity in mind. They can accept contributions as low as £20 and carry a maximum annual charge of 1.5% for the first 10 years, dropping to 1% thereafter. Investment choice can be limited, often to about 20 funds, managed by the pension provider.

    A SIPP offers a far more extensive and flexible approach to investment which can be great for someone who wants to take control of their pension. You can choose from more than 2,500 managed funds within the Vantage SIPP, as well as direct investment in shares, corporate bonds, gilts, investment trusts and cash. You are in control of the investment decisions. If you do not need this flexibility and choice then a stakeholder could be more suitable.

    The Vantage SIPP is a low cost SIPP. The charges depend on the investments you make and hold. Some investments available have running costs lower than those available in a stakeholder pension, but others are more expensive.

  • How do I apply for the Vantage SIPP?

    Once you have read the Key Features, Terms & Conditions and Important Investment Notes, applying couldn't be easier:

    If you wish to make a lump sum contribution with a debit card or set up a regular monthly contribution, you can apply online, or download and return an SIPP application form by post.

    You can also apply by phone on 0117 980 9897 or request an application form to be sent to you by post.

    To transfer an existing pension, please download a SIPP transfer form and return it to FREEPOST: HARGREAVES LANSDOWN. Please ensure you won't lose any valuable guarantees or benefits, or incur excessive exit fees by transferring.

    Before applying, please understand the risks and features of the Vantage SIPP.

Eligibility

  • Am I eligible for a Vantage SIPP?

    If you are a UK resident and under the age of 75, you should be eligible to contribute to the Vantage SIPP.

    You may also be eligible if you have been a resident at some point during the current tax year, if you had earnings chargeable to UK income tax or if you or your spouse or civil partner is a Crown Servant based overseas.

    If you do not meet the above criteria, you may be able to transfer a UK Registered Pension Scheme to the Vantage SIPP, but you are unlikely to be able to make contributions. Before transferring, please ensure you won't lose any valuable guarantees or other benefits, or incur excessive exit fees.

    Please see our interactive SIPP eligibility guide for more details.

  • Can I contribute to a Vantage SIPP alongside other pensions?

    Yes you can. Although you should be aware of your personal contribution limits and the annual and lifetime allowances.

    Before applying, please understand the risks and features of the Vantage SIPP.

  • Can I make a SIPP contribution for my child/grandchild?

    Yes, and contributions are eligible for tax relief. You can pay up to £2,880 into your child/grandchild's SIPP each tax year. The government will automatically add up to £720 (20%) tax relief. If the child has earnings above £3,600, you will be able to pay in more.

    Tax rules can change and the tax relief will be based upon the child's status, not your own. The amount you can contribute to your own pensions will remain unaffected.

    Any higher rate tax relief due will be based on the earnings of the child and can be claimed by them, not you.

    A pension can't usually be accessed until at least age 55 (57 from 2028, then increasing so it remains 10 years below state pension age).

    The child's legal guardian will have to open the SIPP, but anyone can make contributions.

Contributions

  • What is pension carry forward?

    There is a £40,000 annual allowance for pension contributions. However, carry forward allows you to contribute more if you have any unused allowance in the last three tax years.

    Tax rules can change and the amount of tax relief depends on individual circumstances. Before applying, please understand the risks and features of the Vantage SIPP.

  • Can my employer make contributions?

    Yes they can contribute by cheque and/or Direct Debit. Before applying, please understand the risks and features of the Vantage SIPP. More information about the Vantage SIPP.

    Employer contributions are paid gross, so basic-rate tax relief is not deducted from the amount they contribute.

    The Vantage SIPP can also accept employee contributions which are paid by the employer and are deducted from net pay. For more information please contact our Helpdesk on 0117 980 9926.

  • How much can I contribute?

    Please see the How much can I contribute? page.

  • Do I have to contribute a minimum amount?

    Lump sum contributions to the Vantage SIPP must be for a minimum of £100 gross (for personal contributions you pay in £80, then £20 is automatically added in basic-rate tax relief).

    Monthly Direct Debit contributions must be a minimum of £25 gross (for personal contributions you pay in £20, then £5 is added in basic-rate tax relief).

    Transfers from other pension plans should have a combined total of at least £1,000. Please ensure you will not lose any valuable guarantees or other benefits, or incur excessive exit fees by transferring.

    You do not have to make contributions to your Vantage SIPP - there are no additional charges if you choose not to.

    Please note, tax rules can change and the reliefs from them depend on your personal circumstances.

    Before applying, please understand the risks and features of the Vantage SIPP.

  • Can I use existing holdings to contribute to the Vantage SIPP?

    Yes you can, via a process known as Bed & SIPP.

    A Bed & SIPP involves us selling the investment and repurchasing it straightaway within the Vantage SIPP.

    We aim to keep the bid/offer spread, dealing costs and amount of time you will usually be out of the market to a minimum.

    A Bed & SIPP is classified as a pension contribution so should be eligible for tax relief. How much depends on your circumstances. As the Vantage SIPP is a pension, you are usually unable to access the money until at least age 55 (57 from 2028).

    The term Bed & SIPP derives from the tax planning ruse, bed and breakfast, which Gordon Brown ended in 1998, that allowed you to use your capital gains tax allowance on an annual basis by selling a share one day and buying it back the next. However since the investment is bought back in the name of your pension and not your own name it is still allowed under current rules.

    Please see the Bed & SIPP section for more information.

    Before applying, please understand the risks and features of the Vantage SIPP.

  • Can I choose when my monthly contributions are collected from my bank?

    All regular savings payments are collected by direct debit on the 7th of each month. If the 7th is not a working day they will be collected on the next working day. It is not currently possible to change this date.

  • How do I check how much I contributed to my Vantage SIPP last tax year?

    To check contributions for a previous tax year:

    • Log in to your account on our website
    • Select your SIPP
    • Select the 'Transaction history' tab
    • Click the 'View all contributions' button and choose the appropriate tax year. You can download this information to excel or in a PDF.
  • What is the most I can invest in a SIPP?

    Please see the how much can I contribute page.

  • Can I invest in a pension if I don’t have earnings?

    Yes, every UK resident under 75 can make pension contributions, even those with no earnings.

    Their contributions will receive 20% automatic tax relief even if they pay no tax.

    They can contribute up to £3,600 each year - a payment of £2,880 to which the government automatically adds £720.

    This is a very tax-efficient way to invest for a non-earning spouse, child or anyone who's already retired.

    Tax rules can change. Before applying, please understand the risks and features of the Vantage SIPP.

  • Can I use cash from other Vantage accounts to make a SIPP contribution?

    Yes, if you have money available in a Fund & Share Account or Loyalty Bonus Account you can contribute this to your Vantage SIPP subject to the usual pension contribution limits.

    Please note, once the cash has been transferred to your Vantage SIPP, you usually can't access it until you reach the minimum retirement age, currently 55 (57 from 2028).

    Once you've logged in to your account, simply go to the account which contains the cash you wish to transfer and follow the instructions to transfer money.

Tax relief

  • How is tax relief reclaimed on my SIPP contributions?

    We request basic rate tax relief from HM Revenue & Customs on a monthly basis for all personal contributions made between the 6th of the previous month and the 5th of the current month (inclusive). We receive this tax relief from HMRC and apply it to clients' accounts on the 21st of the following month (or the next working day if the 21st is not one), so this is always 6-11 weeks after the date of the initial contribution.

    You can view the date tax relief is due on contributions via your online account. Simply log in, select your SIPP, and click on the 'Transaction History' tab. If you select the 'View all contributions' box you will be able view your contributions, by tax year. On the right-hand side the date any tax relief is due is shown. Dates in red indicate the tax relief has not yet been received.

    Any higher or additional rate tax relief to which you are entitled needs to be reclaimed directly from HMRC. Our Higher Rate Tax Relief Guide explains more, and contains a template letter for you to use.

  • When will tax relief be received?

    We request basic-rate tax relief from HM Revenue & Customs (HMRC) on a monthly basis for all personal contributions made between the 6th of the previous month and the 5th of the current month (inclusive). We receive the tax relief from HMRC and apply it to clients' accounts on the 21st of the following month (or the next working day if the 21st is not one), so this is always 6-11 weeks after the date of the initial contribution.

    For example, if you made a contribution on 15 March, the basic-rate tax relief should be available in your account on 21 May or the next working day.

    To view the dates tax relief will be received, download our tax relief calendar.

  • How do I claim higher-rate tax relief?

    Any higher or top-rate tax relief on your pension contributions can be claimed from HMRC.

    Most people claim their higher / top-rate tax relief via their tax return. If you do not complete a tax return, or do not want to wait until you submit one, you can write to your local Tax Office. Our free Guide to Claiming Higher Rate Tax Relief provides more information and includes a letter template.

    As this money is credited back to you personally and not your pension, Hargreaves Lansdown is unable to claim it on your behalf. Please note you cannot claim more in higher or top-rate relief than you pay in tax.

    If you forgot to claim tax relief for a previous year, you can do so up to four years later. For example, the deadline for claiming tax relief for contributions made in 2015/16 is 5 April 2020.

  • How much tax relief will I receive?

    As an incentive to save for your retirement, when you make a pension contribution, you receive tax relief of up to the highest rate of tax you pay. How much depends on your circumstances.

    Your contributions automatically receive 20% basic- rate tax relief. This means the government in effect pays 20%. For example, to make a £10,000 SIPP contribution, you pay £8,000 and £2,000 tax relief is automatically added. We reclaim the basic-rate tax relief and credit it to your account 6 to 11 weeks later.

    If you pay tax at 40% you can claim back up to a further 20%, reducing the effective cost of a £10,000 contribution to as little as £6,000. 45% -rate taxpayers can claim back up to 25%, reducing the effective cost to as little as £5,500. You must pay sufficient tax at the higher rates to claim the full tax relief.

    The extra tax relief can be reclaimed via a tax return or by contacting your local tax office. It is not automatically added to your SIPP, but is accounted for by a reduction in the amount of tax you pay. If you wish, you can use the extra tax relief to make a contribution to your SIPP, however, this will be classified as a new pension contribution so please ensure you remain within your contribution limits.

    Even if you have no earnings you can still benefit from tax relief - you can pay up to £3,600 in total to pensions each tax year, of which the government will automatically pay up to £720.

    Since April 2010, everyone treated as having income of more than £100,000 has seen a reduction in their tax-free personal allowance. Making a pension contribution can have the effect of reinstating this, resulting in tax relief of up to 60% for a few people. See SIPP tax benefits for more details.

    Whilst these are the current rules, all tax rules may change in the future.

    Before applying, please understand the risks and features of the Vantage SIPP.

  • Where will the tax relief be invested?

    If you make a contribution and give an instruction to invest your contribution in funds, the associated basic-rate tax relief will be invested in the same funds unless otherwise requested. The tax relief will follow the original instruction even if you change how your contribution is invested before tax relief arrives. For other investments tax relief will be held as cash.

  • What tax relief is available on contributions to the Vantage SIPP?

    As an incentive to save for your retirement, when you make a pension contribution, you receive tax relief of up to the highest rate of tax you pay. How much depends on your circumstances.

    Your contributions automatically receive 20% basic rate tax relief. This means the government in effect pays 20%. For example, to make a £10,000 SIPP contribution, you pay £8,000 and £2,000 tax relief is automatically added. We reclaim the basic rate tax relief and credit it to your account 6 to 11 weeks later.

    If you pay tax at 40% you can claim back up to a further 20%, reducing the effective cost of a £10,000 contribution to as little as £6,000. 45% rate taxpayers can claim back up to 25%, reducing the effective cost to as little as £5,500. You must pay sufficient tax at the higher rates to claim the full tax relief.

    The extra tax relief can be reclaimed via a tax return or by contacting your local tax office. It is not automatically added to your SIPP, but is accounted for by a reduction in the amount of tax you pay. If you wish, you can use the extra tax relief to make a contribution to your SIPP, however, this will be classified as a new pension contribution so please ensure you remain within your contribution limits.

    Even if you have no earnings you can still benefit from tax relief - you can pay up to £3,600 in total to pensions each tax year, of which the government will automatically pay up to £720.

    Since April 2010, everyone treated as having income of more than £100,000 has seen a reduction in their tax-free personal allowance. Making a pension contribution can have the effect of reinstating this, resulting in tax relief of up to 60% for a few people. See SIPP tax benefits for more details.

    Whilst these are the current rules, all tax rules may change in the future.

    Before applying, please understand the risks and features of the Vantage SIPP.

Investments

  • Can I hold cash in the Vantage SIPP and earn interest?

    Yes, and there are no charges for holding cash.

    Any interest is paid gross within the Vantage SIPP.

    Before applying, please understand the risks and features of the Vantage SIPP.

  • Can I invest in residential or commercial property?

    Direct investment in a residential property is not available in a pension.

    Direct investment in commercial property is available with some SIPP providers, although this facility is not available in the Vantage SIPP.

    The Vantage SIPP is a low cost SIPP and in order to keep charges low, direct investment in commercial property is not available.

    The Vantage SIPP is, however, able to offer indirect investment in commercial property through individual shares, managed property funds and Real Estate Investment Trusts (REITs). Please remember, the value of investments can fall as well as rise so you may get back less than you invested.

    Before applying, please understand the risks and features of the Vantage SIPP.

  • What is the annual management charge on the Vantage SIPP?

    The annual management charge depends on the investments you hold.

    Cash: no charge.

    More than 2,500 funds (many with exclusive super-low annual charges): First £250,000 0.45% per annum, the next £250,000 to £1m 0.25% per annum, the next £1m to £2m 0.1% per annum, over £2m no charge. (charges are tiered within bands).

    Other investments (e.g. shares, ETFs): 0.45%, capped at £200 per annum.

  • Can I change my investments?

    Yes. A SIPP gives you the flexibility to choose and change your investments when you want, although please remember the value of investments can fall as well as rise so you may get back less than you invest.

    The Vantage service even allows you to do this online or on your smartphone with our free app.

    Investments can also be changed over the phone on 0117 980 9800 with your Master Password to hand, or via post with a signed letter which needs to be sent to:

    Hargreaves Lansdown, One College Square South, Anchor Road, Bristol, BS1 5HL.

    Before applying, please understand the risks and features of the Vantage SIPP.

  • How secure are the cash and investments held in the Vantage SIPP?
  • Are protected rights held separately?

    An estimated 6 million people will have protected rights in their personal pension, as a result of contracting out of the State Second Pension or SERPS (State Earnings Related Pension Scheme).

    Protected rights were abolished on 6 April 2012, meaning you no longer have to hold them separately from the rest of your pension money.

    Protected rights in the Vantage SIPP are merged with 'normal' pension money. This means our clients benefit from managing one single pension.

    Many other pension providers haven't made provision to do this. Which means many people could be left with the difficulties of managing multiple pension pots.

  • Do I have to decide where to invest my money straight away?

    No, you can hold all or part of your Vantage SIPP as cash until you choose where to invest.

    The Vantage SIPP can provide a gross rate of interest on the cash value.

    There are no costs for holding cash within the Vantage SIPP.

    Before applying, please understand the risks and features of the Vantage SIPP.

  • Can I place deals and view my Vantage SIPP online?

    The Vantage SIPP allows you to view the current value online, or on your smartphone or iPad with our free app, at any time, as well as place deals and add further contributions.

    If you already have a Vantage SIPP, you can register for online access.

    Before applying, please understand the risks and features of the Vantage SIPP.

  • Do you offer help with investment choices?

    Our standard service is non-advisory. We offer assistance and information on your investment options and the responsibility for choosing the investments is yours.

    We provide regularly updated investment ideas on our website as well as detailed fund research.

    We also send our Vantage SIPP clients the Investment Times, our regular newsletter packed full of investment ideas and tips.

    If you require personal advice on your investment options then we have a team of Financial Advisers based in our Bristol offices and across the country. Further information on our advisory service can be obtained from our advisory section or by calling us on 0117 317 1690.

Transfers

  • Can I transfer my existing pension to the Vantage SIPP?

    You can normally transfer the following types of pension to our Vantage SIPP without the need for advice:

    • Personal and stakeholder pensions
    • Retirement Annuity Contracts (RACs)
    • Other Self Invested Personal Pensions (SIPPs)
    • Most Additional Voluntary Contribution plans (AVCs) including Free Standing AVCs
    • Executive Pension Plans (EPPs)
    • Most paid-up occupational money purchase plans
    • Old protected rights pensions accrued from contracting out of the State Second Pension or SERPS (State Earnings Related Pension Scheme)
    • Pensions in drawdown

    Before transferring, check you will not lose any valuable guarantees or benefits or incur excessive exit fees. Please also understand the risks and features of the Vantage SIPP, then simply download a SIPP transfer form from our website, return it to us, and we will do the rest of the transfer legwork for you.

    Most pensions are transferred electronically, removing the need for further paperwork and taking just 9 working days on average. If your policy is one of the few that cannot, we will write to your current provider. We do not charge for transferring a pension into the Vantage SIPP.

    For further information, or if your pension type is not listed above, please call our Helpdesk on 0117 980 9926.

  • Can I transfer my Vantage SIPP to another provider?

    Yes, the following charges will apply to cover the cost of the administration:

    • Transfer out as stock: £25 per stock.
    • Transfer out as cash: £25.
    • Transfer out to an Overseas Scheme: £295 transfer fee.
    • A £25 +VAT account closure fee will also apply.

    For more information call our Helpdesk on 0117 980 9926 .

  • Can I transfer an ISA to the Vantage SIPP?

    Whilst it is not possible to transfer an ISA directly to the Vantage SIPP, it might be possible to use cash currently held within an ISA to make a contribution to boost your retirement savings.

    This would be classified as a new pension contribution so you should receive tax relief, however, the cash would lose its ISA status and the amount of tax relief would depend on your circumstances. Please note tax rules can change.

    If you hold stock within an ISA you may be able to transfer that into the Vantage SIPP via a process we call Bed & SIPP. This involves us selling the investment and repurchasing it straightaway within the Vantage SIPP. This should also be eligible for tax relief but once the Bed & SIPP takes place it cannot be reversed and the ISA status is lost permanently.

    Please see the Bed & SIPP section for more information.

    Before applying, please understand the risks and features of the Vantage SIPP.

  • How long will a pension transfer take?

    Where possible, we will try to request a pension transfer via the Origo Options system, which is an electronic transfer facility. Cash transfers using this system on average take less than 9 working days. If the Origo Options system is not available for your transfer then there will usually be a form that needs to be completed by you and by our transfer team. We expect most paper based transfers to take four to six weeks.

    In all cases we are to some extent dependent on the ceding pension scheme to process the transfer in a timely fashion. Whilst our transfer team will chase the transfer regularly, we cannot guarantee any timescales.

    In some cases it may be possible to transfer your pension as stock, to avoid the sale of investments. These "in specie" transfers can take considerably longer than the timescales quoted above, and are only possible where the investments held in the current scheme are also available on the Vantage platform. We will ask you to provide a covering letter with a list of your investments, including ISIN or SEDOL codes, so that we can check your investments for compatibility.

Fees and charges

  • What is the annual management charge in the Vantage SIPP?

    The charge to hold funds is tiered within the Vantage SIPP:

    • 0.45% per annum on the first £250,000 of funds
    • 0.25% on the value of funds between £250,000 and £1m
    • 0.1% on the value of funds between £1m and £2m
    • No charge on the value of funds over £2m
    • The annual charge to hold shares, bonds, Investment Trusts, ETFs or gilts in the Vantage SIPP is 0.45% (capped at £200 per annum)

  • How do I pay my fees and charges?

    We collect fees and charges from available cash on your account. If there is no available cash within your account, we will try to collect fees from cash you hold in your Fund & Share Account.

    Our system will look to collect fees in this order:

    • Loyalty bonuses received on units purchased before 1 April 2014. If no loyalty bonuses then;
    • Cash in the account in which the fees were generated. If no cash on the account then;
    • Cash in your Fund & Share Account. If no cash in your Fund & Share Account then;
    • Sell holdings to cover fees from the account in which the fees were generated
  • How much does a Bed & SIPP cost?

    The charges involved with a Bed & SIPP depend on whether you are using funds, or shares and other investments.

    Funds (Unit Trusts/OEICS)

    There are no dealing charges for carrying out a Bed & SIPP on a fund (Unit Trust or OEIC). However, due to the way funds are dealt, in most cases the re-purchase will not be placed until the following working day.

    As a result, you could be out of the market whilst the sale and repurchase is carried out. There may also be a difference between the selling and buying prices and as a result you may buy back fewer units than you sell.

    Shares and other investments

    Providing you give your Bed & SIPP instruction online or in writing, we will not charge you to sell your shares (we do reserve the right to charge £5 share dealing commission on share sales of less than £500).

    The only charge will be on the re-purchase within the SIPP, and will be subject to our standard dealing commission as laid out below:

    Online applications

    For online instructions, the charge for your repurchase will be between £5.95 and £11.95 depending on the number of trades you have placed in the previous month.

    Postal applications

    1%, minimum £20, maximum £50 per deal + 0.5% government stamp duty.

    Once in the Vantage SIPP, the annual management charge to hold shares is just 0.45% (maximum £45 p.a.).

    You only need to give us one instruction and we will do everything for you. If you would like to use investments in your Vantage Fund and Share Account and you have online access, you can Bed & SIPP your investments online.

    Alternatively, if you hold certificated shares, or would just prefer to apply by post, please complete and return the relevant Bed & SIPP application form.

    When buying the same shares back there will be a small difference in price due to the bid offer spread. Therefore together with the commission and stamp duty this means you will not buy back the same number of shares.

    Please note: We reserve the right to charge £5 commission on share sales of less than £500. When buying the same shares back there will be a small difference in price due to the bid offer spread. Therefore, together with the commission and stamp duty this means you will not buy back the same number of shares as you sold.


  • How can I pay fees from outside my SIPP?

    If you choose not to hold cash within your account or do not wish to use cash from within a tax wrapper (SIPP) to pay fees, you can choose to have all fees collected from the Fund & Share Account.

    To choose this option:

    • Go to the 'Account Settings' section of your account
    • Select the ‘Fee and Minimum Cash Balance’ tab
    • Follow the proceeding onscreen instructions
    • Click on 'Fee collection options'
    • Follow the onscreen instructions to edit your fee collection method
  • What is the Suggested Minimum Cash Balance?

    The Suggested Minimum Cash Balance is designed to give you an idea of the amount of cash you should hold to meet the next few months’ fees, and other outgoings. However, it is just a suggestion and you can ignore it (or amend it) if you wish.

    The Suggested Minimum Cash Balance provides a good guide to how much cash you could hold, but as the value of your holdings will rise and fall, so will your fees. You may wish to adjust the cash balance you hold if there is a significant change in the value of your holdings.

  • Where can I see the fees or charges that have been applied to my account?

    You can view the management fees and charges which have been applied to your account by logging in and going to the Account Administration section of each account you hold. You then simply need to click on the ‘view history of fees charged’ link.

  • When do you collect fees and charges?

    Management fees are charged on a monthly basis and are calculated based on the value of your holdings at the end of each month. They are collected in the next month.

  • Will you tell me before you sell my holdings?

    We provide a notification service to let you know if you have insufficient cash on your accounts to pay fees due and your investments are at risk of being sold. You will then be able to add money (allowances permitting), or sell holdings of your choice to raise money, and therefore avoid your investments being automatically sold. This is an opt-in service so please set an email alert now.

  • How will you collect fees and charges if there is insufficient cash on my account?

    If there is insufficient cash on your account and in the Fund & Share Account to pay, we will sell sufficient holdings to cover the amount owed and restore the suggested minimum cash balance. There will be a charge of £1.50 per deal if an automatic sale is required.

Retiring

  • What happens to my SIPP when I die?

    Any money left in your SIPP when you die can normally be passed to your heirs free of inheritance tax. Any withdrawals they then make will usually be tax free if you died before you were 75. If you die when 75 or older, any withdrawals will be taxed as their income.

    To nominate your beneficiaries, we ask you to complete an Expression of Wish form when you start your Vantage SIPP. You can choose as many people as you want, and change them in the future.

    Please remember tax rules may change in the future.

  • What is pension recycling?

    Pension recycling is when an individual uses a tax-free cash from a pension (when they take benefits) to make a pension contribution to receive tax relief.

    For more information and to see if you might be caught out, please download our Recycling Factsheet.

  • Can I withdraw my money at any time?

    No. Once invested in a pension you cannot normally access the money until age 55. The minimum age will rise to 57 in 2028 and then in line with increases in the state pension age, remaining 10 years below (for example if the state pension age rises to 68, the minimum retirement age will rise to 58).

    When you withdraw money from your pension, normally up to 25% is tax free and the rest taxed as income.

    There is also no obligation to withdraw money from a pension. You may be able to leave your pension invested, never draw an income from it and pass it on to your heirs.

    Like all rules, these may change in the future. The exact treatment of any benefits from your pension will depend on your circumstances.

    To find out more about the pension freedoms and the pros and cons of the options, download our free Options at Retirement Guide below.

    Important information - The information on our website is not personal advice but we can offer advice if specifically requested. What you do with your pension is an important decision, which could be irreversible. Drawdown is a more complex option than an annuity. Make sure you understand your options and check they are suitable for your circumstances: take appropriate advice or guidance if you are unsure. The Government's free Pension Wise service can help. It provides impartial guidance face-to-face, online or by phone - more on Pension Wise.

  • I want to take tax-free cash but do not need / want to take a taxable income from the rest of the fund. Is this possible?

    Yes. You can do this by applying for drawdown – when you apply, specify that you do not wish to take an income. This allows you to access the tax-free cash without immediately taking any taxable income, and you are able to start drawing an income at any time in the future. Please refer to our drawdown guide for further information.

  • How does tax-free cash from a pension work?

    The vast majority of pension schemes, including the Vantage SIPP, entitle you to take up to 25% of the scheme's value as a tax-free lump sum at the point that you take benefits (referred to as "crystallising" the pension). It is potentially possible to crystallise less than the full value of a pension scheme, in which case your entitlement to tax-free cash will be 25% of the value being crystallised. Some pension schemes may entitle you to different amounts of tax-free cash; check with the pension administrator if you are not sure. You are not able to take tax-free cash if you have exceeded your Lifetime Allowance.

  • What are my retirement options?

    New rules took effect in April 2015 which gave investors more options and flexibility when they want to take money from their pensions. Unlike some pensions, the Vantage SIPP offers the new pension freedoms.

    From age 55 (57 from 2028), you can normally start making withdrawals from your SIPP, usually up to 25% tax free and the rest taxed as income. You can withdraw as much or as little as you like, although remember a pension may need to last throughout retirement.

    There are two main ways to take an income – an annuity, which provides a secure income in exchange for all or part of your pension, or drawdown, which lets you keep your pension invested and draw an income from it. Income drawdown is more flexible but comes with increased risk – poor investment performance or large income withdrawals will erode the fund’s value over time.

    To find out more about the new pension freedoms and the pros and cons of the options, download our free Options at Retirement Guide.

    Important information - The information on our website is not personal advice but we can offer advice if specifically requested. What you do with your pension is an important decision, which could be irreversible. Drawdown is a more complex option than an annuity. Make sure you understand your options and check they are suitable for your circumstances: take appropriate advice or guidance if you are unsure. The Government's free Pension Wise service can help. It provides impartial guidance face-to-face, online or by phone - more on Pension Wise.