About PCP's
PCP Car Finance Claims Explained
Standard personal pension schemes are a pooled funds which your investment is a part of and is managed for you.
SIPPs are a form of personal pension that gives you the freedom to select the investments you wish to make and to manage them. If you do not want to make those decisions, you can pay an authorised investment manager who will make the decisions for you.
SIPPs were created for people who want to take control of their funds by dealing with and changing investments when they want to.
The SIPPs option is better suited to people who have investing experience and for those who have larger funds to invest. This means that SIPPs have higher charges than other forms of personal pensions or stakeholder pensions.
- Stocks and shares
- Investment trusts listed on any stock exchange
- UK government bonds, plus bonds issued by foreign governments
- Open ended investment companies which are recognised by the Financial Conduct Authority
- Gilts and bonds
- Exchange traded funds traded on the London Stock Exchange or other European markets
- Bank deposit accounts including non-Sterling accounts
- Commercial property
- Real estate investment trusts listed on any stock exchange
- Offshore funds
- Commodities
- People comfortable with their own investment decisions and who want a wider range of investments
- People with a larger pension ‘pot’ or who will be making significant pension contributions
- People with a financial adviser making decisions on their behalf
- People looking to consolidate all their pensions into one place
- People who want to keep their money invested after they retire so that they can draw down an income
How much could I claim for a mis-sold PCP finance plan?
Calculating how much you could claim on a PCP finance plan depends on a number of factors.
Car Purchase Value
£25,000
APR (with commission added)
7.0%
Normal APR (competitive market rate)
2.5%
Length of Loan
5 years
Refund Amount
£6,591
Tax Relief on PCP
In line with all pension schemes, SIPPs qualify for uo to 45% tax relief on money put onto them. A similar tax-efficient wrapper (the only one) is a stocks and shares ISA. From April 2016 these have an annual contribution limit of £15,240 whereas the annual limit for tax relief on pension contributions is £40,000.
SIPPs can offer valuable tax relief on any commercial premises you own. Your premises can be ‘sold’ to the SIPP and free up funds to re-invest. This will also have inheritance tax benefits.
PCP Car Finance Suitability Considerations
Opening a SIPP is best suited to you if you have investment experience and are at ease with making your own decisions. There are risky investments that can be placed in a SIPP, so may not be suitable for you. However, it is always prudent to seek independent financial advice before going ahead with an investment.
If you do not have the relevant experience, a stakeholder or personal pension may be better suited for you. There may be a limited choice of investments, but you could choose a fund that has a range of assets in it, instead of picking your own.
SIPPs are better suited to people who have larger sums of savings. If you only have a small amount invested the charges could eat into your returns so can end up being very expensive in the long run.