What is a SIPP?
A SIPP (or Self Invested Personal Pension) is a type of registered UK pension that can offer greater flexibility and individual control than traditional occupational pension schemes in the UK. You might say it is comparable to an Individual Retirement Account (IRA) in the US.
SIPPs can be an attractive option for US residents and retirees compared to other forms of UK pensions, particularly older employer, or insurance company pension schemes. While the benefits may vary based on circumstance, a SIPP account can typically offer US residents more control over the underlying investments and greater flexibility in how benefits can be taken during drawdown.
Can I have a SIPP as a US resident?
It is true that many UK pension providers will not accept non-UK resident clients, making it difficult for US residents to move an existing pension. Some UK providers have even been known to restrict US residents’ ability to manage their UK pensions to reduce the risk of improper advice for US taxpayers.
However, there is nothing preventing a US resident from opening and having a UK SIPP account. They are generally viewed as very good options for US residents due to their versatility and the main challenge lies in finding a qualified US/UK advisor who can help with the process.
Why would a US resident transfer their existing UK pension into a SIPP?
A UK pension transfer will not be right for everyone and will depend on a person’s existing needs and retirement objectives. However, for US residents who plan to retire in the US there can be compelling reasons to consider a UK pension transfer. One such example is the currency risk introduced by a mismatch of the pension’s investment currency (British Pounds) and a US retiree’s currency of consumption (US Dollars). In such cases currency risk cannot be eliminated completely but can be mitigated with a SIPP designed for US residents.
If you would like to learn more about our SIPPs for US residents, feel free to contact us for an initial consultation.
Please note that a SIPP might not be suitable for all individuals as personal circumstances vary. Other UK personal pension products are available although may not be accessible by US residents.