We are delighted to announce the introduction of a new facility under our SIPP schemes, which is available to existing and new customers.
What has changed?
We have introduced a facility to make payments under the Small Pension Lump Sum rules.
Payments under these rules, which are sometimes known as ‘small pots’ payments, do not count towards your Lifetime Allowance and do not trigger the Money Purchase Annual Allowance.
What are Small Pension Lump Sums?
You can take up to 3 payments of up to £10,000 each, with a maximum of up to £30,000.
These payments must extinguish the full value of the benefits held within the arrangement under your SIPP and each payment cannot exceed £10,000.
In some cases, it may be possible to reprofile the SIPP arrangements to facilitate this. We have applied specific requirements so that you do not trigger unnecessary tax penalties as a result.
Do I pay tax on the payments?
25% of the amount paid from uncrystallised funds will be without any deduction of tax.
All other payments will be liable for income tax. Depending on the rate of tax you pay, you may be able to reclaim some of the tax deducted or may be required to pay additional tax.
What are the requirements?
We will only allow these payments where your financial adviser has advised and recommend that payments are made.
We will not process any individual payment which exceeds £10,000 and you must not have any of the following forms of Lifetime Allowance Protection:
– Enhanced Protection
– Fixed Protection 2012, 2014 or 2016 (you also must not intend to apply for Fixed Protection 2016)
We will reprofile arrangements to facilitate payments, provided this does not result in the partial transfer of crystallised funds, which would trigger unauthorised payment tax charges.
What is the maximum amount payable?
As each Small Pension Lump Sum cannot exceed £10,000 and the value of each arrangement under the plan must be fully used, the following examples illustrate the maximum amounts payable:
| Uncrystallised fund value | Crystallised fund value* | Maximum amount** |
| £100,000 | £100,000 | 3 x £10,000 from uncrystallised funds |
| £nil | £200,000 | £nil |
| £20,000 | £180,000 | 2 x £10,000 from uncrystallised funds |
| £190,000 | £10,000 | Option A = 3 x £10,000 from uncrystallised funds |
| £190,000 | £10,000 | Option B = 2 x £10,000 from uncrystallised funds + 1 x £10,000 from crystallised funds |
*assumes crystallised funds are held in a single arrangement
**assumes no previous small pension lump sums have been taken.
At what age can I take these payments?
Note that payments cannot be made before you have reached the normal minimum pension age, which is currently 55, unless you have a protected early retirement age or are taking benefits under the ill health rules.
Is there a cost?
In addition to the normal benefit payment fee, there is a charge of £50 +VAT for each payment (maximum 3 payments = £150 +VAT).
February 25th, 2022
The Minerva SIPP can invest in a wider range of assets including commercial property and land, on an individual or group basis. Any combination of permitted investments may be made within a Minerva SIPP including deposit accounts, DFM, open market platform/wrap accounts, stockbroker accounts and trustee investment plans, all held together within the same SIPP.
SIPP Lite is a lower cost option, for those that do not require multiple investment accounts, or access to commercial property and land at outset. SIPP Lite members are restricted to a maximum of one investment account, to run alongside the default SIPP bank account. This investment account could be another bank account or ONE of the following: stockbroker account, DFM, open market platform/wrap account or a trustee investment plan. For individuals that require additional investments at a later date, including commercial property and land, they can upgrade their SIPP Lite plan to a Minerva SIPP.
A Small Self-Administered Scheme (SSAS) is a type of UK registered pension scheme. Each SSAS is governed by its own trust deed and rules and is a separate legal entity to the sponsoring employer. The sponsoring employer establishes the SSAS and invites members to join. Any individual employed by the sponsoring employer (or a participating employer) may join the scheme and all members are appointed as trustees alongside the professional trustee. SSAS trustees have a very wide range of investment options, including the ability to make secured loans to the sponsoring employer of up to 50% of the net asset value of the scheme, subject to certain conditions.
We have been operating in these markets for over 20 years. The SSAS business was formed in 1997, and in 2003 we launched our flagship product, the Minerva SIPP. The range is completed by SIPP Lite, which has been available since July 2012.
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