SIPPS vs S&S ISA

Apologies if this is obvious, but just tried to google this and couldn’t see a clear answer

I don’t want to go into my personal details too much… However, I currently have some savings but I am not currently employed in the UK - so not paying income tax

Am I right in thinking that if I open a SIPP with FT I can still get 720 GBP from government with a max investment of 2880 per year? So - I basically get ‘free money’ on top of my investment that more than covers the charges/fees?

Is this the main difference between a SIPP and an ISA? or am i missing something? (I’m talking about long-term buy-and-forget investing)

Apologies for noob questions. Currently have about 10k sitting in GIA

Hi, welcome to the forum!

Generally speaking, I believe SIPPs are for UK tax residents only (to open and contribute) although depending on the SIPP, there might be allowances if you were a UK tax resident within the previous 5 years (I got that info from this website: Can I contribute to a SIPP when a non-resident? - Experts for Expats)

Probably best to drop Freetrade an email to ask them directly, or better, seek independent advice as there could be potential issues on tax in the country you do reside in.

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A SIPP is a pension product. As you mentioned when unemployed the maximum you can contribute is £2880 and the government will give you 20% tax relief.

As its a pension product there are other restrictions, you can’t generally remove the funds until retirement, there are limits on contributions, it will generally have higher fees (though not always depending on platform), there may be restrictions on who can open one, you pay tax when withdrawing from it at retirement (with a tax free amount). But it will also have different benefits on death.

A ISA is always accessible, you can remove money from it at any time, its often cheaper (depending on platform), but has no tax relief going in, but isn’t taxed going out.

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However, like SIPPs, ISAs can only be opened (and contributed into) while you are a UK resident.

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