Self-Invested Personal Pension
Members' Benefits
You may start to take benefits from your SIPP at any time from age 55. All benefits must have commenced by age 75.
The use of all or part of your fund to provide benefits is called crystallisation. You do not have to retire or stop work in order to take benefits from your SIPP. Benefits may be taken in stages; the full value of your fund does not have to be used to provide benefits at one time. However, if you decide to purchase a lifetime annuity or scheme pension with your protected rights fund, all of the protected rights fund must be used.
A scheme pension offers another alternative to buying an annuity and generally provides a higher level of initial income when compared to an alternatively secured pension at age 77.
Unlike an alternatively secured pension, a scheme pension can provide a guaranteed income, which is paid to your nominated beneficiaries for up to ten years, following your death.
A scheme pension allows you to receive an income direct from your SIPP. The SIPP provides you with a set level of pension in return for your fund. The level of pension is calculated by Rowanmoor Pensions' Actuarial Department and is designed to pay out your fund over your expected lifetime. A scheme pension can be paid at any time from age 55.
To enable us to provide this type of pension, Rowanmoor Pensions must register your SIPP as an individual trust with HMRC. There is an additional fee for this, which is detailed in the Rowanmoor Pensions Self-Invested Personal Pension fees and services document. Please contact us for further information.
We recommend that you seek independent financial advice before proceeding with this method of taking benefits from your SIPP.
When you take benefits from your SIPP, the total value of the funds from your SIPP and any other pension arrangements you have, will be tested against the current lifetime allowance.
If the lifetime allowance is exceeded, there will be an additional tax charge, unless you have pension fund protection.
Currently, there are different rules that apply to retirement and death benefits, which arise from protected rights funds. The Department of Work and Pensions has committed to remove these rules on 6 April 2012. Until this date, your protected rights funds will be separately identifiable from the rest of your fund.
This information relates to the Rowanmoor Pensions SIPP.