Self invested personal pensions can be abbreviated to SIPP’s. SIPP’s have a lot of similarities to normal personal pensions, but there are some added advantages and disadvantages that shall be listed. The advantages of a SIPP pension scheme are as follows.

• An increased amount of flexibility when compared to the majority of other pension types.
• SIPP investments tend to be tax free.
• These tax free investments can account for savings of up to 40% for those who fit into higher tax brackets, and can still save people up to 20% if their income falls into lower tax brackets.

The above shows you what the main reasons would be for considering a SIPP pension scheme. Because of these reasons SIPP pensions are becoming increasingly popular, but arguably the main reason behind gaining a SIPP pension is the level of control that you have over it. Standardized pension plans give very little choice in the way of what can be invested in, but with a SIPP plan you are the sole person who decides what to invest in. Some people may see this as a disadvantage, but if this is the case then perhaps it is advisable to choose a different pension plan. But regardless of this issue there are still some other disadvantages that need to be listed.

• Some of the investments you choose will carry a certain amount of risk attached to them.
• You will be solely responsible for any investments and you will not receive additional help. The option is available to get some, but this of course will incur additional costs.
• Being solely responsible for your investment will require you monitoring your investments, and possibly checking on them regularly.
• A SIPP investment like any investment is never guaranteed.

Like any pension policy there are some drawbacks as listed above, however drawbacks are often an inevitable part of any policy, and in this case it could be argued that the pros out weigh the cons. If this brief summary of a SIPP pension policy sounds appealing then maybe it is in your best interest to speak to an expert who will be able to go through the terms and conditions in greater detail.