SIPP

Stakeholder Pension.

This is just another type of Personal pension. It is designed particularly for the low paid and it has restrictions in terms of charges and access within a standard framework set down by the government. It is also limited in terms of where the contributions can be invested.

Self Invested Personal Pension.(SIPP)

This allows investors to shelter their own investments within a pension. This includes commercial property. Eg Business premises are held within the SIPP and the business pays rent into the SIPP.

There are advantages such as

• Rental income accumulates tax free
• When the property is sold there is no Capital Gins Tax

There are also disadvantages including

• Property maybe difficult to sell
• Lack of diversity in the pension
• High costs of buying and selling and managing the property

Overall the costs are greater than a standard Personal Pension.