Sippdeal SIPP key features

What is the Sippdeal SIPP and what benefits does it offer me?

The Sippdeal SIPP is a personal pension scheme designed to help you accumulate a sum of money which is then used to provide you with an income after you reach your chosen pension age. It can give you greater choice, freedom and control than other types of pension enabling you to select and manage your own investment portfolio from a wide range of choices.

You can pay one-off or regular contributions into the SIPP to take advantage of the generous tax privileges available. You can also transfer existing pension benefits into the SIPP.

The SIPP gives you the flexibility from the age of 55 to decide when you wish to take benefits. It provides for lump sum and pension benefits for you in retirement and for your family and dependants following your death.

What do have to do as a SIPP member

You must ensure that you understand the features, benefits and risks of the Sippdeal SIPP, so that you can be sure it will meet your needs and expectations.

You must ensure that any regular or single contributions paid are sufficient to meet your needs in retirement. There is no penalty for ceasing, or reducing, any regular contributions but your benefits will be affected by the level of contributions paid to your SIPP.

If you transfer benefits into your SIPP from another pension scheme you will be responsible for arranging the transfer from that scheme.

You must decide when to convert your total fund into a pension income. When you make this decision you may be able to take some of your fund as a tax-free lump sum.

You must retain sufficient cash in your SIPP cash account to cover ongoing charges and expenses. The Sippdeal SIPP charges and rates are published on the Sippdeal website.

You must agree to be bound by the Sippdeal SIPP terms and conditions and pay the charges and rates associated with the Sippdeal SIPP.

Factors that could affect the benefits you will receive from your SIPP

The main aim of any pension scheme is to provide you with benefits in retirement. There are three areas in which your decisions will affect the benefits you are able to receive from your SIPP

• payments to the SIPP
• investments within the SIPP and
• withdrawals from the SIPP.

We have set out below the risks most closely associated with these three areas. When deciding whether the Sippdeal SIPP is right for you, you should also consider risk factors that are beyond your control, such as the tax relief's available, inflation, interest rates, annuity rates and charges, and the effect these may have on your pension plans. For further information visit moneymadeclear.

By transferring benefits from another pension provider into your SIPP, you may give up the right to guarantees over the kind of benefits, the amount you will receive and the level of increases that will be applied to your pension in future. Your existing pension provider may apply a penalty, or other reduction in the value of your benefits, if it is transferred. There is no guarantee that you will be able to match the benefits that you give up by transferring into a Sippdeal SIPP.

If you are in any doubt about the benefit of transferring, we recommend that you take advice from a suitably qualified, professional adviser before arranging the transfer.

Your benefits will be affected by the level of contributions paid to your SIPP now and in the future. You may benefit less from investment growth if you delay the payment of contributions to your SIPP.

Please note that the rules relating to tax relief on contributions may change in the future.

The value of investments held in your SIPP and the income from them can fall as well as rise. You may get back less than the amount invested.

Past performance is not an indication of future performance and some investments may need to be held for the long term to achieve a return.

You will be able to deal in a range of investments. Some investments carry a higher degree of risk than others. The following are some specific examples

• smaller companies, the price of which can be more volatile and there may be a large difference between the buying and selling prices
• overseas investments, which may carry an exchange rate risk, and may be based in less well regulated jurisdictions and
• warrants and other highly geared investments, the prices of which are extremely volatile.

Some investments are described as complex financial instruments. If you invest in these you should be aware that you may lose all your money. Before investing in one of these investments you will have to complete an appropriateness test, as required by the rules of the Financial Services Authority.

We do not provide investment advice as this is an execution only service. We do provide information about investments, but this is provided solely to enable you to make your own investment decisions and must not be treated as a recommendation. If you need advice to determine whether an investment is suitable for you, you must consult a suitably qualified financial adviser.

If the value of your SIPP is small and/or you deal frequently in small amounts, dealing costs may be disproportionately high and the value of your SIPP may be eroded.

You should note that rules relating to the taxation of capital gains and income from investments may change in the future.

The investment returns may be less than those shown on any illustrations of benefits you receive and the charges may be higher.

If you start to take benefits earlier than you originally intended, the level of the benefits you can take may be lower than expected and may not meet your needs in retirement.

Your SIPP may be subject to additional tax charges at the point you withdraw funds if your pension is valued at more than the lifetime allowance (£1.5 million 2012/13).

If you take income withdrawals this may erode the capital value of your fund. If investment returns are poor and a high level of income is taken this will result in your SIPP falling in value and could result in a lower income than anticipated in the future.

If you choose an annuity to provide your benefits, the level of income you receive is based upon the average life expectancy of someone of your age. When fixing annuity rates, providers take into account the fact that some people will die earlier than expected, effectively subsidising those who live longer. Income withdrawals paid from the SIPP do not have the benefit of such a subsidy.

There is no guarantee that annuity rates will improve in the future. If you choose to purchase an annuity, the level of pension you receive when you purchase the annuity may be less than the pension previously being paid under income withdrawal and/or the annuity you could have purchased previously.

Having considered these risks, if you have any doubts about the suitability of the Sippdeal SIPP or you need advice, you must seek advice from a suitably qualified professional adviser.

The Sippdeal SIPP could be right for you if you

• are looking to build up a pension fund in a tax-efficient way
• understand that growth is not guaranteed
• are prepared to commit to having your money tied up, normally until at least age 55 and
• require access to wider investment opportunities, such as investment in a portfolio of listed stocks and shares.

It may not be suitable if you

• want unrestricted access to your money, or
• are only likely to require access to a more limited range of fund management type investments, such as those available under insurance company personal pension or stakeholder pension plans, or wish to invest directly into assets, such as commercial property, that are not available through the Sippdeal SIPP.

If you have any doubts about the suitability of the Sippdeal SIPP you should contact a suitably qualified financial adviser.

You can have a Sippdeal SIPP if you are resident in the UK.

If you are resident overseas you can set up a Sippdeal SIPP for the purposes of transferring benefits from a UK registered pension scheme.

The Sippdeal SIPP is not a stakeholder pension.

Stakeholder pensions are relatively simple pension plans, with limited investment options, for which the Government has set minimum standards to be met by providers covering areas such as charges, minimum payment levels and terms and conditions.

Stakeholder pensions are generally available and may meet your needs at least as well as a SIPP. If you are in any doubt about the suitability of a SIPP you should contact a suitably qualified financial adviser.

To see full charges and rates for the Sippdeal SIPP, please use this link.

The Sippdeal SIPP terms and conditions set out the full terms and conditions for your SIPP.

You can pay personal contributions into your SIPP. In addition, contributions can be paid by another person on your behalf (e.g. by your spouse, parent or grandparent) and treated as your personal contributions for tax purposes.

If you are employed, your employer can also pay contributions into your SIPP.

Once your SIPP is set up you can pay single contributions and/or increase/decrease your regular contributions at any time, subject only to the minimum contribution levels described below.

Once you have reached age 75 we will no longer accept any contributions paid by you. If you are still employed we can accept contributions paid by your employer.

There is no requirement to pay any contributions if a transfer payment is paid to your SIPP.

If you want to contribute, the minimum single contribution is £1,000 (gross). There is currently no minimum level for your regular monthly contributions.

Single contributions can only be paid by debit card, cheque or electronic transfer. Regular contributions must be paid monthly by Direct Debit. Contributions paid by Direct Debit will be taken on the first working day of the month.

Contributions cannot be paid in the form of shares or other investments.

If you have registered with HM Revenue & Customs for enhanced protection (for pension rights built up before 6 April 2006) or fixed protection, the payment of any contribution to your SIPP will result in the loss of this protection.

If you have applied for flexible drawdown, you will have to pay an annual allowance charge on all contributions paid to your SIPP of up to 50% of the value of the contribution.

In each tax year, you will get tax relief on personal contributions paid by you, or on your behalf, up to 100% of your UK earnings.

If you have no UK earnings, or your UK earnings are less than £3,600 a year, you can still pay contributions up to £3,600 (gross) and receive tax relief.

Any contributions from your employer do not count against this tax relief limit.

All personal contributions (whether you are employed or self employed) are payable net of basic rate tax (20% for 2012/13). As an example, if you pay a net contribution of £800 then we will reclaim £200 from HMRC and credit this amount to your SIPP cash account once it has been received. Basic rate income tax will be credited to your SIPP cash account after between 6 and 11 weeks depending upon when your contribution is paid. You must claim any higher rate relief to which you are entitled, via self-assessment.

We will only accept contributions up to the limit for tax relief referred to above. You must tell us within 30 days if you are no longer entitled to tax relief on your contributions.

All employer contributions are payable gross. Your employer will normally receive tax relief on any contributions they pay to your SIPP and you will not normally be taxed on these contributions.

HMRC use the annual allowance to restrict tax relief on large contributions.

The annual allowance is £50,000 for 2012/13.

If for any 'pension input period' ending in a tax year, the total of

• contributions paid to registered pension schemes by you, or on your behalf (including any paid by an employer); and
• the increase in the value of your benefits under any final salary schemes

is greater than £50,000 you will exceed the annual allowance.

A factor of £16 per £1 p.a. of pension will be used to value the increase in benefits under a final salary scheme.

For the purposes of your SIPP, the pension input period will always coincide with the tax year i.e. it ends on 5 April, unless you notify us that you wish it to end on a different date in any tax year.

If you exceed the annual allowance, you may be able to “carry forward” your unused annual allowance from the previous three tax years. Carry forward is subject to a maximum of £50,000 for each tax year and the amount you can carry forward is reduced by your annual allowance usage during those tax years.

If having made use of carry forward you still exceed the annual allowance, you will have to pay a tax charge on the excess. The tax charge will be based on the marginal rate of tax relief received on the contribution.

Yes. You can transfer benefits from any UK registered pension scheme into your SIPP.

However, please note that we will not accept transfers from final salary pension schemes unless you have received advice on the transfer from a suitably qualified financial adviser. Before making a final salary transfer you must confirm to us that you have received such advice.

You can make a transfer even if you have commenced drawdown under the scheme from which you wish to transfer. The benefits will be subject to the same maximum income limit and pension year as under the scheme from which you are transferring.

Please note that you will be responsible for arranging the transfer from the transferring scheme. It may take some time for us to receive the transfer payment from your existing provider.

Yes, although any investments transferred 'in specie' must be an acceptable investment for your SIPP.

You can transfer the value of your SIPP to another UK registered pension scheme, or qualifying recognised overseas pension scheme (QROPS), at any time.

If you have started taking benefits from your SIPP, then you must transfer the whole of that part of your fund from which you are drawing benefits to your new scheme. If you have uncrystallised funds under the SIPP (i.e. no benefits have commenced) you can choose to transfer all, or only a part, of those uncrystallised funds to another pension scheme.

If the transfer is to a QROPS a check against your lifetime allowance must be carried out before the transfer payment is made (see ‘How does the Lifetime Allowance work?’ below) and so it is possible that a lifetime allowance charge may apply.

The transfer can be in the form of a cash payment, in which case you will have to sell all of the investments held under your SIPP before the transfer is completed, or you may be able to transfer them in their existing form (known as an "in specie transfer").

You can invest in any securities that are quoted on a recognised stock exchange that are settled within CREST. This range includes UK and Irish securities as well as international securities across 21 markets. You can find out more about international securities in our dealing FAQs.

These include

• shares
• government bonds
• corporate bonds
• permanent interest bearing shares (PIBS)
• warrants
• covered warrants
• investment trusts
• exchange traded funds and
• exchange traded commodities.

A wide range of funds is also available covering over 2,000 unit trusts and OEICs, many with discounted initial charges. Please see the funds list for further details.

Yes you can.

Our regular investment service allows you to invest every month in a wide range of investment opportunities, including the FTSE 350, over 2,000 funds in the Sippdeal
funds list and selected investment trusts, ETFs and ETCs.

Setting up a regular investment is simple and once we have received your instruction, we will automatically make your deals on the 10^th calendar day of each month (or the next working day).

Obviously for us to make your deals, there must be sufficient money in your cash account to pay for them. If there isn’t, we won’t make your deals on that given month and will try again the next month.

You are also able to amend your regular investment instructions up until midnight on the 9^th calendar day of each month (or midnight on the day before the regular investment dealing day).

No, there is no tax to pay on any dividends or capital gains. Tax deducted at source on dividends, however, cannot be reclaimed.

You can obtain a valuation of your portfolio 24 hours a day, 365 days a year via our website. An online cash transaction summary is also available.

Yes. Your SIPP cannot invest directly in

• commercial or residential property
• insurance company bonds
• private (unquoted) company shares
• personal chattels (e.g. works of art, cars etc.)
• loans or
• any activity that could be regarded as trading.

Also, you cannot borrow money under your SIPP.

The A J Bell Group does offer another SIPP with a wider range of investments than Sippdeal, including commercial property. Please visit www.ajbell.co.uk.

You can commence benefits, whether or not you continue to work, at any time from age 55.

It may be possible to commence benefits earlier if you are in serious ill-health or transfer benefits to the SIPP from an existing pension with a lower pension age provided the transfer meets certain HMRC requirements.

Please read Sippdeal’s charges and rates for the charges associated with taking benefits.

You can take, or "crystallise", benefits from all, or only a part, of your SIPP. This will allow you to phase your benefits to suit your personal circumstances.

You must complete a benefit form to tell us how much of your SIPP is to be used to provide your benefits and how you want the benefits to be paid. The form will also ask you about your available lifetime allowance and any protection you have for benefits built up before 6 April 2006.

There is no limit on the benefits that may be provided for you under your SIPP. However, if the total value of your pension savings, under all registered pension schemes, exceeds the 'lifetime allowance' then there will be an additional tax charge, called the lifetime allowance charge on the excess.

The lifetime allowance is currently £1.5 million.

Yes. You can have a tax-free lump sum (also known as the "pension commencement lump sum"). The value of this can be up to the lower of

• 25% of the value of the fund applied to provide your benefits and
• 25% of your unused lifetime allowance.

If you have protected lump sum rights, then you may be entitled to a larger tax-free lump sum.

You cannot take a tax-free lump sum with the intention of using it to increase your pension contributions. This is because the lump sum will be treated as an unauthorised payment. You will be taxed on the payment at between 40% and 55%. Your pension fund will also be subject to a tax charge of between 15% and 40% (depending on how much of the tax charge you have already paid).

Once the amount of your tax-free lump sum payment has been agreed, the remaining fund will be used to provide you with a pension in one of three ways - drawdown pension, flexible drawdown or a lifetime annuity.

Drawdown pension
Drawdown pension, also known as "capped drawdown" is when your pension fund remains invested and you draw an income from the fund, up to a maximum level set by HMRC. There is no minimum level of income, so you can elect to receive a "nil" pension, if you wish.

You can choose to take a regular monthly, quarterly, half yearly or annual income. Regular payments are made on the third Monday of each month. You can also take one-off pension payments to suit your circumstances.

The maximum level of annual income is set at 100% of the Government Actuary's Department's (GAD) relevant annuity rate. This rate varies depending on your sex, age and returns from Government securities and is applied to the value of your pension fund at the date the fund is first used to provide drawdown pension and at each subsequent review.

The maximum income will be recalculated every three years until you reach age 75 and annually thereafter.

You can elect to have the maximum income level reviewed at each anniversary of the date funds were first designated to provide drawdown pension. You must make the election before the relevant anniversary.

If your SIPP holds a mixture of funds that have and have not been used to provide you with benefits, you can choose to draw further benefits at any time. This will normally trigger an immediate review of the maximum income level and also a further check against the lifetime allowance.

You can choose to purchase a lifetime annuity with your drawdown pension fund at any time.

If you purchase an annuity from your drawdown pension fund before 75^th birthday a further lifetime allowance check will normally be carried out.

A further lifetime allowance check will also be carried out on your drawdown pension fund at your 75^th birthday unless the drawdown pension fund commenced before 6 April 2006 and no further funds have been added to that drawdown pension fund on, or after, that date.

Before selecting a drawdown pension you should read the
‘Income withdrawal from your SIPP’ section under ‘Risks’.

Flexible drawdown
Flexible drawdown is an option allowing you, if you meet certain conditions, to draw funds from your SIPP without any annual limits.

You have the flexibility to withdraw all of the funds from your SIPP in one go, to draw a regular income over and above the “capped drawdown” limits to suit your ongoing requirements, or simply to draw additional funds to suit one-off circumstances.

The flexible drawdown option is only available to you if you are able to meet a Minimum Income Requirement (MIR). In order to meet the MIR you must have secure retirement income of at least £20,000 per annum. Income from state pensions and lifetime annuities qualifies for the MIR, but income from drawdown pensions and non-retirement incomes does not.

Additionally, if you make a contribution to any pension scheme (or accrue benefits in a final salary scheme), you may incur significant tax charges.

You cannot use flexible drawdown if contributions have been paid to a registered pension scheme in your name in the same tax year. If you do, flexible drawdown payments may be classified as ‘unauthorised’ and be subject to unauthorised payment charges. If you make contributions once you have taken flexible drawdown, they will be subject to the annual allowance charge.

Lifetime annuity
A lifetime annuity is a regular, taxable, income guaranteed to last you for life. Buying a lifetime annuity involves passing the value of your SIPP to the insurance company of your choice.

The annuity available will depend on the value of your fund, annuity rates at the date of purchasing the annuity and the type of annuity you choose.

If you buy an annuity, you will usually cease to have any involvement with the investment of your pension fund. This may be the right option if security of income is an important issue.

All pensions paid to you under drawdown, including flexible drawdown, will be subject to income tax. We will deduct the tax due before paying your pension.

If you purchase a lifetime annuity, the annuity provider will be responsible for the payment of income tax.

The Government has set the standard lifetime allowance at £1.5 million for 2012/13.

Each time new benefits commence ("crystallise") a portion of your lifetime allowance is used up. When you reach your 75^th birthday any uncrystallised funds will also use up a portion of your lifetime allowance, as may any benefits crystallised after 5 April 2006.

Once you have used up your lifetime allowance, any benefits paid above the allowance will be subject to the lifetime allowance charge. If excess funds are used to provide a taxable pension, the lifetime allowance charge is 25% of those funds. Alternatively if excess funds are paid as a lump sum the lifetime allowance charge is 55%. We will deduct this tax charge from your fund and pay it to HMRC before paying your benefits.

If you built up substantial pension savings before 6 April 2006 and have registered for enhanced and/or primary protection ('transitional protection') with HMRC then this may reduce, or eliminate, any lifetime allowance charge that would otherwise be payable.

You could also lock your lifetime allowance at £1.8 million by applying for fixed protection before 6 April 2012. If you hold fixed protection any further contributions to registered pension schemes will cause the loss of the protection.

No. You are not forced to take lump sum or pension benefits from your SIPP at any time.

However, the tax charges applied to lump sum death benefits paid from your drawdown pension fund will also apply to the undrawn part of your fund from your 75^th birthday.

Death benefits payable from your SIPP
Death benefits may be paid as a lump sum or applied to provide pension benefits for a spouse, civil partner or dependant, either under income withdrawal or by annuity purchase.

Death benefits are payable at the discretion of A J Bell Management Limited, as the Scheme Administrator, of your SIPP. You may nominate the individuals you wish to receive benefits and your wishes will be taken into account. You may complete a new nomination at any time.

Lump sums paid on death are normally free of any Inheritance Tax but we cannot guarantee that this will be the case. A tax deduction of 55% (2012/13) will typically be applied to lump sum death benefits paid from income drawdown funds. Lump sum death benefits paid from funds of individuals who died aged 75 or above will be subject to tax of 55% regardless of whether they had started to draw benefits. The 55% tax deduction is not applied where the lump sum is paid to a registered charity.

Lifetime annuity
The benefits payable, if any, will be determined by the terms of the annuity contract.

The scheme is governed by a trust deed and rules, as amended from time to time. This key features document summarises the main provisions of the rules and of the legislation that applies to registered pension schemes. However, in the event of any discrepancy between the key features and the trust deed and rules the trust deed and rules will prevail. A copy of our ‘Scheme Rules’ can be downloaded from our Sippdeal website, as a PDF file.

A J Bell Management Limited is the Scheme Administrator of the Sippdeal SIPP and is responsible for the day to day administration and management of the scheme. Sippdeal Trustees Limited, a wholly owned subsidiary of A J Bell Management Limited, is the trustee of the scheme.

A J Bell Management Limited is part of A J Bell, one of the largest providers of low cost, online investment platforms and stockbroker services in the UK, with assets under administration exceeding £15 billion and more than 59,000 clients.

A J Bell Management Limited is authorised and regulated by the Financial Services Authority. Sippdeal Trustees Limited does not conduct any regulated activities and is, therefore, not regulated.

The investment dealing service is provided by A J Bell Securities Limited, which is also part of A J Bell.

A J Bell Securities is a member of the London Stock Exchange and is authorised and regulated by the Financial Services Authority.

Bank of Scotland is the provider/establisher of the Sippdeal SIPP. The Bank will satisfy any statutory obligations that it may have from time to time, as provider/establisher of the Sippdeal SIPP.

You have a legal right to cancel your SIPP, if you change your mind. If you wish to cancel you must do so within 30 days of the date you receive our letter confirming the establishment of your SIPP.

Cancellation rights will also apply to the receipt of transfer payments and on the first occasion that you choose to take income drawdown. You will have 30 days from the date that you receive our letter acknowledging the transfer or establishing the drawdown to exercise your right to cancel.

You may exercise your right to cancel by writing to us at

Fax: 0845 54 32 601
Email: enquiry@sippdeal.co.uk

quoting your name and SIPP reference number.

You must state whether you wish to cancel your SIPP, a specific transfer, or drawdown.

If you wish to make an investment during the 30 day cancellation period you can do so, but this will lapse your cancellation rights. Lapsing your rights will mean that you cannot cancel your SIPP, contributions or transfers.

Further information about your cancellation rights is included in the Sippdeal SIPP
terms and conditions which are available at www.sippdeal.co.uk.

Yes. The Financial Services Compensation Scheme (FSCS) has been set up to deal with compensation, if firms are unable to meet claims made against them.

For bank deposits the maximum claim that could be made by your SIPP is £85,000.

Further information about the compensation arrangements is available from the Financial Services Compensation Scheme at www.fscs.org.uk.

No. Sippdeal, A J Bell Management Limited, A J Bell Securities Limited and Sippdeal Trustees Limited are not authorised to provide any advice on tax or financial services related matters.

If you need any advice then you must contact a suitably qualified financial adviser. Your adviser will give you details about the cost of advice.

You can contact Sippdeal by writing to

or by emailing Sippdeal at enquiry@sippdeal.co.uk

or by phoning Sippdeal on 0845 54 32 600

Customer satisfaction is very important to us and if you do have any cause to complain about the services provided there are clear procedures laid down by the Financial Services Authority to ensure that your complaint is dealt with fairly.

Please contact us in the first instance at

Tel: 0845 54 32 600
Fax: 0845 54 32 601
Email: enquiry@sippdeal.co.uk

If you are not satisfied with our response, you may refer your complaint to the Pensions Ombudsman, if your complaint concerns the administration of your SIPP.

Help is also available from The Pensions Advisory Service (TPAS) who can advise you on how to complain and may be able to sort the matter out, without the need for the Ombudsman to get involved. The address for both the Pensions Ombudsman and TPAS is as follows

Tel: 0845 601 2923

All other complaints may be referred to

Tel: 0845 080 1800

Making a complaint will not affect your right to take legal proceedings.

The information contained in this key features document is provided based on our understanding of current law, practice and taxation which may be subject to change.

Full details of the legally binding contract between you and A J Bell Management Limited are included in the Sippdeal SIPP ‘terms and conditions.

The law of England and Wales will apply in all legal disputes.

If you would like a copy of this or any other item of our literature in large print, Braille or in audio format, please contact us on 0845 54 32 600 or by email enquiry@sippdeal.co.uk.

All of our literature and future communication to you will be in English.