Self-Invested Personal Pension (SIPP)

When you pay into a Barclays SIPP, we will automatically claim basic rate tax relief at 20% from HMRC and add it to your pension pot. This means if you pay £8,000 into your SIPP you’ll receive a further £2,000, boosting your pot to £10,000.

As you may expect there are some restrictions. Firstly, it’s limited to 100% of your annual UK earnings. Even if you don’t pay Income Tax you can still contribute up to 100% of your earnings. And, while you can benefit if you don’t have any earnings, you’ll only get tax relief on the first £2,880 you pay into a pension each tax year – topped up by HMRC by £720 to give you £3,600 (6 April to 5 April).

If you pay Income Tax above the basic rate you can claim additional tax relief on your Self-Assessment tax return to bring the total relief to either 40% or 45%.

If you have an Investment Account, Investment ISA or use Barclays Online Banking with a current account just log in to apply.

If you don’t have any of these you can apply for a Barclays SIPP without logging in.

You can top up your Barclays bank account, or by a debit card, bank transfer, Direct Debit or cheque. To use your debit card simply log in to Smart Investor and go to the ‘pay in’ section where you’ll find a link which takes you to the website of the SIPP administrator AJ Bell, and they’ll process your contribution. You’ll be asked for your SIPP Account number and your date of birth, please have these to hand.

Please note it will take up to five working days for the money to be available to invest in your SIPP. Alternatively, you can top up by bank transfer, Direct Debit or cheque.

There’s a limit on the amount you can contribute to your pensions each tax year which attracts tax relief – known as your Annual Allowance. For most people this is £60,000 per tax year, or 100% of your UK earnings, whichever is lower.

Pensions also offer the unique benefit of being able to ‘carry forward’ any unused annual allowances from the previous three tax years. The amount you carry forward is reduced by your annual allowance usage during those tax years.

If you exceed the Annual Allowance, you will normally face a tax charge, as any excess contribution will be subject to your marginal rate of income tax.

Your Annual Allowance will be reduced if:

• You’ve drawn a taxable sum from a defined contribution pension, in which case the amount you can pay into Defined Contribution or Money Purchase pensions (excluding Defined Benefit pensions) and receive tax relief reduces to £10,000 per tax year or 100% of your income, whichever is lower (and you can also no longer make payments in relation to previous tax years).
• If your total income is above £200,000 and your income and pension contributions made on your behalf exceed £260,000 your Annual Allowance will be tapered.⁽⁴⁾

We don’t offer tailored financial advice, so if you’re not sure about investing or how a pension works, seek independent advice. Tax rules can change and their effects on you will depend on your individual circumstances.

When you’re eligible and decide to retire, one option is to take up to 25% of your SIPP as a tax-free lump sum.
There’s an upper limit to this tax-free sum known as the Lump Sum Allowance (LSA), which for most people is set at £268,275. This limit won’t affect most savers as they apply to those with pension pots upward of £1 million.

There is also another limit called the Lump Sum and Death Benefit Allowance (LSDBA), which for most people is £1,073,100. This puts an upper limit on how much can be paid out as tax-free lump sums on death if you die before the age of 75, but it’s also reduced by the tax-free lump sums you take during your life. After 75, all death benefit lump sums are taxable in the hands of the beneficiary.

The changes mean you can save into your pensions without the concern of a lifetime allowance tax charge should you breach the limit. However, you should consider whether making any lifetime contributions will affect other entitlements provided under any lifetime allowance protection that you may have.

We can take care of that. You’ll just need to complete a SIPP transfer form which can be found by logging in to My hub and selecting ‘SIPP’ from the list of your accounts available, then click on the link to ‘Transfer in investments’.

Transferring is simple and usually takes around a month if you want to keep your investments exactly as they are in your current pension. Transfers can be faster if you sell and transfer your pension as a cash sum, but you will miss any growth in the market while the transfer takes place.

We accept transfers from UK pension funds including:

• Personal pensions
• Executive pension plans
• Stakeholder pensions
• Group pension plans
• Company-sponsored money purchase schemes.

Before transferring your pensions, you should check that you wouldn't be giving up any benefits of your existing pensions. This might include loyalty bonuses, guaranteed annuity rates or spousal pensions.

Please note that we can’t accept transfers from defined benefit pension schemes into the Barclays SIPP as it’s unlikely to be in your best interests to transfer these savings into a SIPP.

If you have any doubts whether you should transfer a pension, you should seek advice from a financial adviser.

For more information on SIPP transfers and possible penalties read our factsheet [PDF, 1.3MB].

Once you have decided to go ahead and you’ve opened your SIPP simply complete and return the form and we’ll take care of the transfer legwork for you.

When you reach retirement age (usually 55 rising to 57 from 2028) you can:

• Take up to 25% of your savings tax-free and then draw a taxed income as you need to.
• Take a lump sum or even the whole fund at once and 25% will be tax-free. Beware, taking money out of one or more of your pensions in this way may increase your income in a given tax year significantly and result in you paying more tax than you would do if you drew an income gradually. 
• You can buy an annuity to receive a guaranteed income for the rest of your life.
• Take smaller amounts as and when you like with 25% of each withdrawal being tax-free.
• You can also use a combination of these options.

For more information on taking benefits from your SIPP and the points to consider read our article on retirement options.

This minimum age for drawing pension benefits is set by the government and may rise in future. All amounts drawn above the 25% tax-free lump sum will be taxed at your marginal rate at the time.