Purchase of Shares Through Pensions

Self Invested Personal Pension

A Self Invested Personal Pension (SIPP) can invest in individual company shares traded on any international stock market.

Before you invest any part of your pension fund into stocks and shares, please seek professional advice.  The stock market is simply a market where the shares of companies stocks are purchased and sold.  Companies sell shares within their company because they need to raise finance.  These shares can be bought and sold for any price that a buyer and seller agree but the stock market provides the price at which the shares are currently selling for.

Growing your investment

Your investment in stocks and shares grows in two ways:  the first way is through an annual dividend, which in basic terms is a share of the profits that the company makes each year.  Your share of the profits (or dividend) is defined by the percentage of the shares that you own in the company.  The second way that your investment grows or shrinks is through the value of your shareholding.

The value of your shares changes as the company’s performance and perceived performance for the future change.  For example, if a company has just signed a large contract for a number of years, then the value of the shares may increase as demand from people wishing to buy a part of that company goes up.  Similarly, if they lost a contract, the share price could fall.

In buying individual shares, you always need to be aware you can always lose all of your investment.