Types of accounts • 1 min read
A CIRCA5000 Personal Pension is a type of Self-Invested Personal Pension (SIPP), a tax-efficient retirement savings account available in the UK. A Personal Pension gives you more flexibility than other types of traditional pension, meaning you can choose your own investments as well as contribute as often as you like.
Like with ISAs, Personal Pensions allow you to grow your money without worrying about UK income and capital gains tax.
You will also get tax relief on your contributions on 100% of your annual earnings, up to £40,000 per tax year. This means that any money you invest into your Personal Pension will be topped up by up to 25% by the government (higher or additional-rate taxpayers may be able to claim back more.)
As Personal Pensions are intended to save for your retirement, or for later in life, you can’t take money out as freely as with other accounts. You currently can’t access your Personal Pension until age 55, but when you do, you can take 25% as tax-free cash. It is best to speak to a suitably qualified advisor if you are unsure about these rules.