Saturday 16th December 2017
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Financial Products Explained

For detailed information and to request an information booklet on any of the below, visit Killik & Co

Protected Rights

Protected Rights are pension monies which come from opting out of the State Pension system. They can be invested through SIPP's (and other types of pensions) into a very wide range of investments including direct Equities, Commercial Property and Unit and Investment Trusts.

ISA

Anyone over the age of 18 can have their own Individual Savings Account. You can save up to £7,200 each year into a Stocks and Shares ISA and this money can be invested in direct equities, Unit Trusts, Investment Trusts and Corporate Bonds (with more than 5 years to go to maturity)

The great advantage of an ISA is that it can provide tax free income or can be fully or partly costed in at any time.

SIPP's

SIPP's are very tax efficient pension wrapper which can invest in anything from direct Equities to Commercial Property to Corporate Bonds. They are personal transferrable pensions which can be with you for life.

They are not for everyone however with greater freedom comes greater risk.

ISA's or SIPP's – Which is best?

There has long been a debate about which is best – ISA's or SIPP's. The SIPP can provide tax relief on any contribution so the Government effectively contributes to your pension. It can also provide up to 25% of the value of the SIPP as Tax Free Cash from 50 (or 55 from the 5th April 2010) The downside is that income is liable to income tax. ISA's don't offer tax relief on the way in but they can provide a tax free income and can be surrendered at any time in full or part.

Bonds

A Bond is a means by which a Government or Companies or other organisations can borrow money – these are called Bonds. Government Bonds are often called Gilts whereas Company Bonds are often called Corporate Bonds. Both will usually produce a yield which in the case of a Government Gilt is called a coupon.