DIY Pension Where You Are the Boss; Thousands Take a Sipp as Low-Cost, No-Frills Retirement Plans Change the Market

Article excerpt


RETIREMENT planning is far too important to be left to other people, according to Richard Winship.

Richard, 55, is not a professional investor. But he is among 100,000 savers who manage their own pension portfolios, picking individual shares and deciding when to buy them and when to sell.

He and wife Barbara, 54, run a nursing home in Bickington, North Devon. But when it comes to their finances and future plans, he wants to be in control.

With a growing number of likeminded savers, Richard has turned to a lesser-known scheme, the self invested personal pension (Sipp).

Like all pensions, a Sipp is just a wrapper. Money paid into it attracts generous tax relief and is allowed to grow free of most taxes.

The big difference with Sipps is that pension savers choose the investments they hope will help the fund grow.

In the past, Sipps were generally taken out by well-off individuals or business owners. This was partly because they were costly and poor value for smaller savers and partly because the flexibility of Sipps meant that business assets, such as commercial property, could be put to use in the portfolio.

For instance, a business owner could put company premises 'inside' the pension and then pay rent into the pension, too, as another way to boost the fund.

But new, no-frills, low-cost Sipps have changed the landscape. The plans are no longer just for highrollers with huge funds and complex tax-planning needs.

The Winships' pension money is invested through nothing-ventured.

com, the online arm of Londonbased stockbroker Durlacher.

About [pound]16,000 is in the Sipp, though Richard plans to transfer savings from other pension plans and pay in lump sum contributions from outside the pension.

HE estimates their total pension assets are worth [pound]200,000 and plans to control half of this himself, investing in a portfolio of about a dozen shares. He regularly studies newspaper financial pages and the internet.

Other pension investments are spread among unit trusts, which in turn are invested in a mix of shares, bonds and cash. …