In effect a SIPP is an empty box, or wrapper, which can contain many investments, approved by HMRC for pension purposes. By using a SIPP wrapper you are not tied to the products of one pension provider, but are free to choose the most suitable investment vehicle for your circumstances.
A SIPP arrangement with pension fund withdrawal offers the facility to take retirement benefits by means of drawing income directly from the fund rather than having to purchase an Annuity. This is a particularly important facility as it allows you to remain invested whilst drawing retirement income and has important consequences when considering estate planning and death benefits. Furthermore, the investment flexibility inherent in the plan gives the scheme the opportunity for some significant gains.
Benefits can be taken from the age of 55 and you do not need to stop working in order to take benefits from the plan. HMRC may permit certain exceptions to the age limit if you are in serious ill health.
SIPPs are complex and as a result financial advice is recommended before enacting a scheme for your retirement.