SIPP pension advice
A self-invested personal pension gives you far wider investment choice and full drawdown flexibility. It also asks more of you. Here is how to judge whether it fits.
A SIPP is a personal pension with a much broader investment universe than a standard plan — funds, individual shares, investment trusts, ETFs, gilts and corporate bonds, and in some cases commercial property.
The tax treatment is the same as any other pension: relief on contributions at your marginal rate, tax-free growth, and 25% of the pot normally available tax-free from age 55, rising to 57 in 2028.
What differs is control, cost structure and responsibility. A SIPP suits someone who wants genuine choice and will engage with it. It is poor value for someone who will leave it in a default fund and never look again.
Who a SIPP tends to suit
- People consolidating several pots who want one flexible home with a wide fund range.
- Those wanting phased, flexible drawdown rather than an annuity, with precise control over how much is taken and when.
- Company directors and the self-employed making variable contributions, particularly where employer contributions are used to extract profit tax-efficiently.
- Anyone whose existing plan cannot support the retirement income strategy they actually want.
Understanding what it costs
- SIPP charges typically come in layers: a platform or administration fee, the annual charges of whatever you invest in, and dealing costs if you trade individual securities.
- For a straightforward portfolio of funds, a modern SIPP is often cheaper than an older personal pension. For a small pot with a fixed annual administration fee, it can be markedly more expensive as a percentage.
- The right comparison is total cost against total cost, on your actual balance — which is precisely what an adviser will set out for you.
Points worth being careful about
- Commercial property. Permitted and often attractive for business owners, but illiquid — it can be difficult to sell when you need income.
- Unregulated investments. Some SIPPs allow exotic holdings. These sit behind a great many of the pension scams the FCA warns about. Treat any unsolicited approach as a red flag.
- Engagement. A SIPP's advantage is choice. If you will not use it, you are paying for flexibility you do not need.
Questions we get asked
Talk it through — free, and with no obligation
A short conversation with an FCA-regulated adviser will tell you where you stand. There is no cost and no pressure to proceed.