Investors choosing SIPPs to get more control over their savings, research indicates

News - Savings

Written by Ray Clancy

Thursday, 26 August 2010 10:31

Over a quarter of investors say the main reason for choosing a Self Invested Personal Pensions is so they can actively manage how their pension is invested, according to a new study.

Nearly a fifth of SIPP holders chose it primarily to supplement their main pension savings and a third of SIPP holders are confident they can achieve better returns than a pension fund manager, the research from Barclays Stockbrokers shows.

Some 28% primarily chose to invest within a SIPP so that they can actively choose how their retirement savings are invested, and one in five, 19%, of account holders see a SIPP as an ideal way to supplement their main pension savings, the research from the UK’s largest online execution only stockbroker also shows.

SIPP investors are also confident of their own investment choices, as a third, some 33%, believe they can outperform a professional pension fund manager.

Further research from Barclays Stockbrokers also reveals that despite the importance of retirement planning, over one ten investors, 12%, do not currently have any pension provisions in place.

‘Pension savings have been hit hard in recent years by volatile market conditions and the demise of final salary pension schemes. Therefore savings must work harder to achieve the returns needed to ensure a comfortable retirement. Retirement planning remains a priority for many of our clients and we continue to see investors, who have the necessary experience and skills, taking control and actively managing their pension savings,’ said Paul Inkster, head of Product at Barclays Stockbrokers.

‘Investors who are actively managing their savings and are engaged with the investment markets can sometimes feel frustrated with passively watching the returns generated by pension funds, particularly if they feel unable to take advantage of market conditions. SIPPs are ideal for experienced investors who want to take control and manage their own pension pots,’ he explained.

‘SIPPs are the most tax efficient trading account available and allow investors the flexibility to build a retirement portfolio to match their appetite for risk. Our clients are continuing to take advantage of the control and transparency offered by a SIPP and the freedom it provides to maximise their potential retirement savings,’ he added.

Asked the main reason for choosing a SIPP, 33% said it was because the believe they can achieve a better performance than a pension fund manager, 28% because they wanted to actively choose how their money is invested, 19% said it was to supplement their main pension, 11% said it was to enhance savings through tax relief and 9% said it was to consolidate pension pots from former employees.

Asked where they have pension savings some 42% said it was with a final salary pension scheme or employer scheme, 31% a personal pension or SIPP, 13% said their long term investments such as property are their savings for the future, 12% don’t have a pension and 3% said they have pension savings but don’t really understand them.