For many people, SIPPs offer the opportunity to take control of their own pension future.  The reasons for this may be to improve investment diversification, disenchantment with the traditional pension route offered by large Insurance Companies or simply to access their pension without committing to the purchase of an annuity.

A SIPP offers a number of benefits, some of which are detailed below.  There can be additional charges under this type of arrangement which can make them suited to larger investment funds of perhaps £100,000 or more.  In recent years the costs have come down and investing through a SIPP can be more or less expensive than a personal pension depending on the assets held and the size of the fund.

You are able to benefit from the following:-

• A wide range of investment options including direct purchase of commercial property
• Ability for the SIPP to borrow money to fund the purchase of assets such as commercial property
• Tax efficient contributions and a tax efficient investment fund
• Ability to take total control over your pension fund
• Access to your pension fund from age 50 (55 from 2010); you can take your tax free cash and an income from your pension account

Many individuals have moved to the full SIPP option without fully utilising the investments available.  In this situation you may prefer to investigate fund supermarket pensions which offer access to over 1,000 funds in many cases but without the annual SIPP charges which can range from £350 plus VAT to perhaps £500 plus VAT per annum.