Retirement Planning

Up to 25% of a SIPP can usually be taken tax-free, subject to a lump sum allowance of £268,275, with the remainder taxed as income at the saver's marginal rate.

Common structures include outright purchase, joint purchase with the sponsoring employer and in-specie transfer of existing premises into the scheme.

Key conditions include a maximum loan of 50 per cent of the SSAS net asset value, a maximum five-year term, equalCapitaland interest instalments, first legal charge security and interest of at least 1 per cent above the bankBase Rate.

It is registered with HMRC, regulated by The Pensions Regulator, and member-trustees usually exercise day-to-day control over how scheme funds are invested, including in commercial property and member loans to the sponsoring employer.

SIPPs are regulated by the Financial Conduct Authority and benefit from HMRC tax relief, with contributions, growth and most income sheltered from income tax andCapital-gains-tax/">Capital Gains TaxuntilWithdrawal.

The Bengen 4% rule is a US-based illustration. UK research, including studies referenced by the IFS and PPI, often suggests 3–3.5% may be more sustainable depending on assumptions about returns,Inflationand longevity.

For the 2025/26 tax year the standard annual allowance is £60,000, with a £3,600 gross limit for non-earners and a Money Purchase Annual Allowance of £10,000 once benefits have been flexibly accessed.