RL360 has teamed up with a leading pension administration business to create a Self-Invested Personal Pension (SIPP) to be used with our single premium products.
The RL360 SIPP can either be set up entirely online, a major plus given the current Covid-19 crisis, or via a paper application form. It is also more cost effective than other pension schemes.
The SIPP will be managed by Hartley Pensions, experts with a strong track record in this field. It is open to both UK and non-UK residents and will be perfect for those clients who want to carry out a pension transfer or begin funding their retirement.
A SIPP is a tax-efficient investment vehicle intended to provide benefits in retirement. The investment component of the RL360 SIPP is restricted to RL360 products only.
Neil Chadwick, RL360’s Head of Technical Services, said: ‘In conjunction with Hartley Pensions, we are really pleased to be able to offer advisers the choice of an alternative pension product that enables the application and ongoing servicing of the scheme to be done entirely online.
‘Recent months have demonstrated the importance of being able to make people’s lives as easy as possible and we believe this is a major step in the right direction.’
Michael Baber, Technical Director at Hartley Pensions, added: ‘We are really pleased to be working closely with RL360, we pride ourselves on establishing and maintaining long-lasting relationships with our business partners and clients by providing them with professional, friendly and personalised administration services. Our products are designed to be flexible, straight-forward and relevant to our clients’ needs.’
Existing pensions can generally be transferred to an RL360 SIPP from HMRC recognised schemes. Transfers are also possible from defined benefit schemes (eg final salary schemes).
Please note that personal advice from a Financial Conduct Authority regulated adviser, with the appropriate pension transfer qualifications, is required.
Minimum initial contribution is GBP 20,000 with RL360’s Oracle product as the underlying investment vehicle, or GBP 50,000 for PIMS. If you’re transferring an existing pension to an RL360 SIPP there’s no requirement to make any additional contribution as long as the amount exceeds these minimum levels.
A scheme member can make personal contributions to a SIPP, as can others including a spouse, parents or employer.
Who manages the investment held in the RL360 SIPP?
A financial adviser must be appointed to manage the investments within the SIPP. Neither RL360 nor Hartley Pensions are investment advisers or managers, nor do they give any financial or tax advice.
What types of assets can be held within the SIPP?
The standard RL360/SIPP asset acceptance rules apply to any investments or fund links made available through the Oracle and PIMS products. Residential and commercial property cannot be held.
When can SIPP benefits be accessed?
The earliest age a scheme member can start taking money from their SIPP is 55 (due to rise to 57 in 2028) unless they are in serious ill health, as defined by the Finance Act 2004.
How can benefits be taken?
Scheme members can drawdown up to 25% of their SIPP free of UK tax from the age of 55 as a Pension Commencement Lump Sum (PCLS), but the remaining pot must form a ‘drawdown plan’. From 2028, PCLS can only be accessed from age 57.
After taking a PCLS, there is the option to have complete flexibility (known as ‘flexi-access’) as to how a scheme member draws down from their plan (i.e. any combination of lump sums or monthly payment), but each drawdown will be taxed at the member’s normal UK income tax rate, irrespective of whether lump sums or regular income is taken.
What happens to the SIPP on the death of the scheme member?
If death occurs before the age of 75, a beneficiary can choose to take a UK tax free lump sum or transfer the SIPP into their own name or an external pension scheme.
If death occurs after age 75, the beneficiary can choose to take the whole pot as a lump sum but this will be subject to a UK tax charge at the marginal rate of the beneficiary or they could transfer the SIPP into a pension arrangement in their own name which can be used to take an income via drawdown. Any income taken will be subject to UK income tax at the beneficiary’s normal rate.
Whilst the UK may not apply a tax charge to a payment from a SIPP, other jurisdictions may do so.
A Double Taxation Agreement between the UK and the scheme member’s country of residence may also dictate which jurisdiction has taxing rights over any payment received.
*The scheme member should always obtain tax advice specific to the jurisdiction where they are tax resident to understand the tax consequences of any payment they request.