There are significant tax advantages to retirement planning with a registered pension scheme and a SIPP benefits from all of these, the main ones of which are:

• Tax relief of up to 40% on your personal contributions subject to your relevant UK taxable earnings and the annual allowance;
• Tax relief to an employer on their contributions;
• Accumulated investments within the SIPP grow free of income tax;
• Sale and disposal of any investments (including equities, bonds and property) will not be subject to capital gains tax;
• The ability to normally take up to 25% of the fund as cash free of tax upon first crystallisation of your benefits;
• On death before any benefits are crystallised, the accumulated fund can normally be distributed tax-free to your spouse and/or dependants.

Other key points to consider are:

• Benefits can only be drawn (crystallised) from the fund after the age of 55 (50 until 5 April 2010);
• Any income you receive when you are taking benefits will be taxed at your marginal rate;
• If your SIPP were to invest in some assets HMRC deem as ‘taxable property’ then there will be significant tax charges applied;
• The fees payable for having a SIPP.