On Abundance, you make the decisions on where you want to invest your money. You choose the investments that have the impact you care about, with a return and risk that is right for you.
You can make those investments through the portfolio of your choice, with three options available - Innovative Finance ISA, Abundance Pension or a Standard portfolio. You can find an overview of the three options here.
What is an Abundance Pension?
The Abundance Pension allows you to make investments on Abundance and hold those investments in a tax efficient self-invested personal pension (SIPP), allowing you to diversify and complement your existing pension holdings. With the Abundance Pension you make your own investment decisions and choose the investments you want to make on Abundance.
As a pension, you can make contributions to your pension and receive tax relief on those contributions (subject to your personal circumstances and HMRC pension regulations, which may change) and transfer money to or from an existing pension you may have. The returns on your investments held within your Abundance Pension will be tax free.
The Abundance Pension restricts you to making investments on Abundance only so you will not be able to hold any other investments such as those available in the wider financial market. The Abundance Pension alone will therefore not provide all
your retirement planning needs and you should consider additional investment products or pension plans to meet your overall needs.
The Abundance Pension has been developed by Abundance in conjunction with Gaudi Regulated Services Limited (Gaudi)*.
What is a SIPP?
The Abundance Pension is a type of pension called a self-invested personal pension (SIPP). A SIPP is a DIY pension that lets you save for your retirement and also receive additional benefits in the form of tax incentives.
Because a SIPP is a self-invested pension it means you are in control of the investments you choose to make within your pension and, as with all investments, this carries risk. If you are in any doubt as to whether a SIPP is right for you, please seek independent financial advice.
How does a SIPP work?
A SIPP enables you to hold either a single asset or mixed assets (depending on the provider) within a single wrapper, which also carries tax benefits, as you pay the money in before income tax is taken off.
In practical terms, this means that contributions you make into your SIPP will have an instant tax relief of 20% applied at source, meaning your capital that is available for investment will be increased by 20%. Higher rate taxpayers can claim an additional tax relief of up to 20% retrospectively via their tax return. If you make a transfer from another pension plan you will not receive any tax relief as you will have already received the tax relief previously.
A SIPP operates in two primary phases. In the initial phase you make contributions or transfer existing pension funds to invest within your SIPP. During this period all investment income (and, in the case of our investments, capital repayments) are kept within the SIPP wrapper for reinvestment.
At age 55 you can choose to enter the drawdown phase and start to withdraw money from your pension (called taking benefits), although you can continue to reinvest your investment income if you choose. It is at the point of withdrawal that you pay tax on your income, at your marginal rate (subject to HMRC's prevailing tax regulations at the time).
It is also worth noting that, under current pension regulations, you are permitted to withdraw up to 25% of your total pension pot as a tax free lump sum at age 55, though you should consider carefully (and take investment advice where appropriate) as to whether this would be the right decision for you and your retirement plans.
What are the fees?
Unlike a Standard or IF ISA portfolio on Abundance, there are fees to open and hold an Abundance Pension. These fees are charged by our pension provider, Gaudi. You can find more details about the fees here.
Can I hold an Abundance Pension alongside my existing SIPP or other personal pension?
Yes, you can hold multiple SIPP and pension accounts, which means you can set up an Abundance Pension to run alongside your existing SIPP holdings with other providers.
As the Abundance Pension is a single asset SIPP, and restricts you to only investing in the investments we have available on Abundance, you should carefully consider whether an Abundance Pension can meet all your retirement needs. If you are in any doubt as to whether the Abundance Pension is right for you, please seek independent financial advice.
Is Abundance a pension provider?
Abundance is not a direct pension provider, and doesn’t provide pension advice. We are authorised to arrange pensions, which is why we work with Gaudi Regulated Services Limited (Gaudi) to provide the Abundance Pension.
What you do with your pension is an important decision. There are new options and new flexibilities available at retirement — but also more risks. It is vital to understand your options, and take appropriate guidance or personal advice if you are not sure.
The Government’s new Pension Wise service offers free, impartial guidance to help you understand your options at retirement. You can access the guidance online here, over the telephone on 030 0330 1001 or face-to-face. It is not personal advice.
Who are Gaudi Regulated Services Limited (Gaudi)?
Gaudi provide the Abundance Pension. Gaudi are a Trustee and SIPP Administrator and provide branded pension products for investment providers like Abundance. They currently manage around 4,000 open SIPPS. Gaudi will provide support to Abundance Pension holders on some technical matters relating to their pensions, but in the first instance Abundance Pension holders should contact us for support.