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.

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. 
  • 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 Customers (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

*46% in Scotland

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.

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 can 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 low-cost flat rate fees - free to open and no percentage based platform fees
  • Interest paid on cash – follows the Bank of England Base Rate currently 0.1%
  • 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

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 2021/22 pays £179.60 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

Low-cost 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
  • Transfer in other pensions for £60 per plan (capped at £300)

Important Notice

We are committed to improving our online service and from time to time need to take our service off-line to deliver system updates.  During these periods existing customers won’t be able to log into Share Dealing and new customers won’t be able to open a new account. We always try and keep maintenance periods to a minimum and the next planned outage will be:

  • Saturday 24th April 06:00 to 18:00 on Sunday 25th April
  • Saturday 8th May 06:00 to 18:00 on Sunday 9th May

We apologise for any inconvenience this may cause.

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

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Our SIPP is administered by AJ Bell.
 

SIPP rules

  • The maximum you can save in a pension is £1,073,100 – this covers all pensions (excluding the state pension) and is called the ‘lifetime allowance’.
  • You can contribute 100% of your earnings up to a maximum of £40,000 (as long as you have enough money to support yourself) – the annual allowance for 2021/22. If unused, you can carry forward three previous tax years allowances.
  • For people self-employed, you won’t have an employer adding money into your pension. However, you’ll get tax relief on your own contributions, either up to £40,000 a year or your annual earnings (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.
  • For high income individuals the annual allowance is tapered. In tax year 2021/22, for every £2 of ‘adjusted income’ above £240,000, the annual allowance is reduced by £1. The maximum reduction is £36,000, which means that someone with an income of over £312,000 has an annual allowance of £4,000.
  • Once you’ve accessed your pension, the amount you can pay in each year drops to £4,000. If you only take a pension commencement lump sum (you can usually take up to 25% tax free) and no income from drawdown, the limit on contributions is not affected.
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.

Apply for a SIPP

Before you apply for an account, make sure you’ve reviewed and understand the:

 

Apply now

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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.