Pensions can be a complex area for many. Outside of the “usual culprits” there are other less known pension types. Some of these pensions are no longer available as new pensions but some are still in existence, such as Retirement Annuity Contracts.
Here is an insight into three other types of money purchase pension schemes - retirement annuity contracts (RACs), self-invested personal pension schemes (SIPPs) and small self-administered schemes (SSASs).
Retirement Annuity Contracts
Retirement annuity contracts (RACs) were used by individuals who did not have access to an occupational scheme, or self-employed individuals. RACs were effectively replaced by personal pensions on 1 July 1988.
Self-Invested Personal Pension
A self-invested personal pension scheme (SIPP) is a pension wrapper holding investments, which offers greater investment flexibility than ordinary personal pensions. SIPPs became registered pension schemes on A-Day i.e. 6 April 2006.
Small Self-Administered Schemes
Small self-administered schemes (SSASs) are usually occupational money purchase schemes, typically used by small family businesses. SSASs are similar to SIPPs in that they have greater investment flexibility than ordinary personal pension but the trustees have more regulatory duties than SIPPs as they are scheme administrator.
If you retain or would be interested in setting up a SIPP or SSAS you will require financial advice in order to better understand the pros and cons of these schemes. Please contact us and we’ll arrange a meeting with one of our Financial Advisers to discuss your requirements – we look forward to hearing from you.