Self-Invested Personal Pension (SIPP)

Our Self-Invested Personal Pension can help you take control of your pension. A SIPP gives you all the standard tax benefits of a pension, but you get a greater investment choice which can also help spread your money further and reduce your risk.

With so many options, it can be hard to choose where to start. That's why, working with AJ Bell, our SIPP administrators, we offer a SIPP Start-Up Fund. The fund aims to help people save for retirement through steady growth over the long term.

 

Start a SIPP

What is a SIPP?

  • A SIPP is a pension pot that holds your investments in one place until you retire and decide to draw a retirement income.
  • You can choose how much you want to invest and how much to take out from age 55 (57 from 2028) onwards.
  • You can transfer most types of pensions to a SIPP, and combine them letting you manage your pension pot in one place. The transfer form is included in our application pack. Find out more about the benefits and risks of transferring your SIPP.
  • You can invest in a wide range of investments including shares, Exchange Traded Funds (ETFs), over 2,500 funds and more which can help diversify your portfolio.

Why invest in a SIPP?

1. Tax relief

When you invest in a SIPP there are a number of tax benefits you receive.

  • Investments within a SIPP are free from UK tax including capital gains and income tax. 
  • Your SIPP receives government tax relief.  For example, if you pay in £6,000 then HM Revenue and Customs (HMRC) will add £1,500 to make it £7,500. Also, higher rate taxpayers can receive an additional £1,500 through their tax return. This means a £7,500 investment only costs £4,500.

    If you have no UK earnings you can still take advantage of tax relief. You can invest up to £2,880 per year, and receive £720 of tax relief, which gives you a total of £3,600. 

 

Tax benefits examples

We’ve created a tax benefits example to help simplify and show how this can work in practice. Please note, tax treatment depends on individual circumstances and may be subject to change in the future. We do not give tax advice and as tax relief is dependant on individual circumstances the amounts we show may vary to your own.

Table showing tax relief information for higher rate tax payers

Your tax bracket

Your contribution

Government top-up (20%)Paid into SIPP account

Further tax reliefClaimed through annual tax return

Total tax relief

Your tax bracket

Non-earner (max contribution)

 

Your contribution

£2,880

Government top-up (20%)Paid into SIPP account

£720

Further tax reliefClaimed through annual tax return

£0

Total tax relief

£720

Your tax bracket

Basic rate (20%)

 

Your contribution

£6,000

Government top-up (20%)Paid into SIPP account

£1,500

Further tax reliefClaimed through annual tax return

£0

Total tax relief

£1,500

Your tax bracket

Higher rate (40%)

 

Your contribution

£6,000

Government top-up (20%)Paid into SIPP account

£1,500

Further tax reliefClaimed through annual tax return

£1,500

Total tax relief

£3,000

Your tax bracket

Additional rate (45%)

 

Your contribution

£6,000

Government top-up (20%)Paid into SIPP account

£1,500

Further tax reliefClaimed through annual tax return

£1,875

Total tax relief

£3,375

Please note, tax rates in the above table only apply to England and Wales.

AJ Bell logo.

Our SIPP is administered by AJ Bell.
 

2. Financial security

A SIPP can help protect your retirement pot and estate from inheritance tax. This means beneficiaries won’t risk paying 40% in tax like other inherited assets worth £325,000 and above.

  • All SIPP benefits will normally be paid tax-free, if the holder dies before the age of 75.
  • If the SIPP holder dies after the age of 75, the beneficiary can take any inherited funds as income through drawdown rather than a lump sum. For example, having a taxable income of £30,000 and inheriting £50,000, you could take £10,000 per year taxed at 20% rather than taking a lump sum which could be taxed at 40% if incurring inheritance tax.
  • If the nominated beneficiary of the SIPP doesn't withdraw all of the inherited funds before they die they can also be passed on to their beneficiaries. This is a way of passing wealth down through the generations.

3. Flexibility when you retire

You can consolidate your pension when you retire and have the flexibility to access your money when it’s right for you.

From age 55 (57 from 2028) you can access your money in different ways that suits you.  You have a number of options and the freedom to choose one or more, or delay making a decision:

  • Pension drawdown allows you to take a one-off tax-free lump sum up to 25% of your pension, and gives flexibility for how you can take the remainder of your money.
  • An annuity gives you a secure, regular income for the rest of your life.
  • Continuing to invest in your SIPP can allow your pot to grow tax-free, which can potentially give you more income once you need it.
  • Once you reach age 75, we can no longer accept any contributions you pay yourself, even if this is to cover administration fees of the account. But if you are still employed, we can accept contributions your employer pays.

Guidance on your options is also available from Pension Wise, a free and impartial government service. It is not intended to be a substitute for financial advice.

If you consolidate old pensions into a SIPP it could help you achieve your retirement goals and give you control over where your pension is invested.

Find pension service

Find out more in our Benefits Guide (PDF, 165 KB)

Why choose Bank of Scotland?

  • Simple fees - free to open and no percentage based platform fees
  • Choose from a wide investment choice and research tools - with UK and international shares, funds, exchange traded funds (ETFs), bonds and gilts plus investment ideas, tools and analysis
  • Helping hand - If you're unsure where to invest you could choose our SIPP Start-Up Fund. Or, if you'd like to build your own portfolio, use our select list of funds or ETF Quicklist to help.

What does a SIPP offer?

  • Helps you save tax efficiently for your retirement
  • Freedom to choose where to invest your money and spreads your risk
  • Income in the form of regular income and/or lump sums
  • Reduce inheritance tax by passing on more of your money

Why should I save into a pension?

  • The state pension as of 2023/24 pays £203.85 per week which is less than the average retirement income according to the Government’s most recent data
  • Money paid in income tax can go towards your future instead
  • When you retire you can take up to a quarter of your pension as a tax-free lump sum
     

 

Simple investing

  • Free to open and no percentage fees on holdings
  • Low admin costs (quarterly account charge of £22.50 if the SIPP value is £50,000 or less, and £45 if the value is above £50,000), deducted from the SIPP
  • £9.50 dealing commission per online trade
  • Zero commission on international online trading (1.25% foreign exchange rate still applies)
  • Transfer in other pensions for £60 per plan (capped at £300)
     

Completing our application

Step 1 – Start your application online

Step 2 – Download and print our application form and post to the AJ Bell address provided

Step 3 – Alternatively you can scan the original signed form and send via email to bossipp@sippdeal.co.uk. Electronic signatures or photographed forms cannot be accepted. If you have completed a transfer request as part of your application, please post the original signed Transfer Form to AJ Bell.

Start a SIPP

Useful forms

  • Additional contribution – To complete if you wish to contribute a lump sum or start a regular contribution
  • Transfer form – Transfer an existing pension or SIPP to us
  • Transfer in drawdown – Transfer a pension already in drawdown
     

Find out more about SIPPs

SIPP rules

  • The Lifetime Allowance limit is currently £1,073,000 and if your pension fund exceeds that amount, it could be subject to an additional tax charge. This tax charge will be removed from 6th April 2023 and the Lifetime Allowance completely abolished from 6th April 2024. This change means you can save as much as you want into your pension fund without an extra tax charge. Please note, whilst you can still take tax free cash from your pension, the amount you can take will be limited going forward.
  • You can contribute the equivalent of 100% of your earnings (as long as you have enough additional money to support yourself) up to a maximum of £60,000 – the annual allowance for 2023/24. Unused allowances from up to three previous tax years can be carried forward.
  • If you are self-employed, you won’t have an employer adding money into your pension. However, with a SIPP you’ll get tax relief on your own contributions, either up to your annual earnings or £60,000 a year (whichever is lower).
  • When you turn 55 (57 from 2028) you can start withdrawing money from your SIPP, even if you're still working. You can usually take up to 25% tax free.
  • There is a Tapered Annual Allowance (TAA) for high income individuals. From 6th April 2023 where adjusted income is over £260,000 tapering may apply. Adjusted income includes all income plus any employer pension contributions paid in the relevant period. When the £260,000 limit is exceeded tapering will apply if threshold income is above £200,000.  Threshold income includes all income but is reduced by personal contributions entitled to relief at source. Where both limits are exceeded the Annual Allowance is tapered by £1 for every £2 over the adjusted income limit. The lowest allowance available in 2023/2024 will be £10,000. This will apply to those with adjusted income of £360,000 or more as it is now tapering down from £60,000 (previously £40,000).
  • If you flexibly access your pension and withdraw an income, the amount you can pay into your SIPP each year drops to £10,000. If you only take a pension commencement lump sum (you can usually take up to 25% of your pot tax free) and no income from drawdown, the limit on contributions is not affected.

Ready to apply for a SIPP?

Pensions are a long-term investment. The retirement benefits you receive from your pension account will depend on a number of factors including the value of your account when you decide to take your benefits which isn't guaranteed, and can go down as well as up. The value of your account could fall below the amount paid in. Tax treatment depends on individual circumstances and may be subject to change in the future.

Start your SIPP

You will just need your address, debit card details, national insurance and a printer to print our application form.


Open a SIPP


Bank of Scotland Share Dealing SIPP Service Terms & Conditions (PDF, 474 KB)

Bank of Scotland Share Dealing SIPP Scheme Terms & Conditions (PDF, 133KB)

Need a little more information? Our Investing quick guide (PDF, 723KB) could help you.

FSCS protected logo.

Investments with Bank of Scotland Share Dealing are protected up to a total of £85,000 by the Financial Services Compensation Scheme. This limit is applied to the aggregated total of any stock or cash held across the following brands that we administer.

This is in addition to any other savings deposits you may hold across Lloyds Banking Group.

AJ Bell Management Limited is the Scheme Administrator of the Bank of Scotland Share Dealing SIPP. AJ Bell Management Limited is registered in England No. 3948391. Registered Office: 4 Exchange Quay, Salford Quays, Manchester M5 3EE. Authorised and regulated by the Financial Conduct Authority and on the FCA register under FCA register number 211468. Sippdeal Trustees Limited is a wholly owned subsidiary of AJ Bell Management Limited, registered in England No. 4050222. Registered Office: 4 Exchange Quay, Salford Quays, Manchester M5 3EE. Sippdeal Trustees Limited does not conduct any regulated activities, and is, therefore, not regulated.

Dealing and stock broking administration services are provided by the Bank of Scotland Share Dealing Service which is operated by Halifax Share Dealing Limited. Registered in England and Wales No. 3195646. Registered Office: Trinity Road, Halifax, West Yorkshire HX1 2RG. Authorised and regulated by the Financial Conduct Authority under registration number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.