Compare self-invested pension plans that let you take control of your retirement pot by choosing where to invest it and how much risk to take.
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Work out your needs
Self investment pension plans offer different levels of flexibility. Full SIPPs are suitable if you're an experienced investor, while a low-cost or "lite" SIPP could be more suitable if you have a smaller pension fund.
Run a pension comparison
Have a look through the options to find the best self investment pension plan. Importantly terms, starting sums and fees can vary between providers. So check any conditions attached to the plan, then pick a deal that offers the highest return for your investment needs.
Apply and invest
You may be able to get a competitive SIPP by applying online. Some lenders and brokers only ever operate digitally. So compare quotes online and once you've decided on the provider you want, simply apply.
Pensions are long term investments. You may get back less than you originally paid in because your capital is not guaranteed and charges may apply.
Last updated: 1 May 2022
A Self-Invested Personal Pension (SIPP) – often referred to as a “SIPP pension” or a “DIY pension” – is a pension that you're responsible for arranging and managing.
A SIPP works very much like a standard personal pension, except you have more flexibility and control over where your pension is invested.
A SIPP holds your investments until you retire, at which point you can start accessing the funds. It’s crucial to find the best SIPP for your needs.
There are two kinds of SIPP:
Full SIPP: this gives you the most choice over where to invest. This could be the best SIPP option if you have a large pension fund and lots of experience with investing. Although the charges are high, you get access to a team of experts with whom you can discuss your investments
Low-cost SIPP: this is sometimes called a low-cost DIY SIPP or lite SIPP. It still offers plenty of choices on where you can invest, but not as much as a full SIPP. There's no option to own property or offshore funds, or to invest in unquoted shares. This could be the best option if you have a smaller amount of pension savings – you can start a low-cost SIPP with a £5,000 lump sum – and the charges are lower. With this kind of SIPP, you won't get any advice from the pension provider: low-cost SIPP providers simply act on your instructions
Whichever type you choose, it's important to find the SIPP provider that suits you best. Some offer a bells-and-whistles service with the latest technologies, while others are more no-frills. As you’d expect, no-frills providers are likely to be cheaper.
Standard personal pension
With a standard personal pension, the investments are all managed for you by your pension provider. You don't need to get involved. They also have a shorter list of funds to choose from.
With a SIPP you're free to manage all the investments yourself. You could pay an investment manager to do it for you, but SIPPs are really designed for people who want to manage their own pension fund.
You can switch your investments whenever – and to wherever – you like. You just instruct your SIPP provider to do what you want.
Our SIPP comparison shows you which markets you can invest in when building your SIPP. The options include:
shares in AIM and FTSE
Permanent Interest-Bearing Shares (PIBS)
personalised pension funds
Research each market before choosing the SIPP provider that suits you best. SIPP providers all offer different funds, with varying investment strategies.
As with any pension, SIPPs come with advantages and disadvantages. Researching SIPP providers to find the best SIPP is crucial.
you have the freedom to control your fund and invest how you like
you can choose to invest in a long list of funds
you can get tax relief on your savings
you can pay in until you're 75
you can pass on some of your wealth, free from inheritance tax
SIPP withdrawal rules are flexible
you're responsible for making all your own decisions
SIPPs are only suitable for people who understand investing
you'll need to spend time and effort choosing and managing your portfolio
your money is locked in until you're at least 55
there's a limit on how much tax relief you can get
charges can be higher than with a standard pension
The costs can vary a lot, depending on how you invest. SIPP providers may also differ in what they charge.
There's a range of charges you might expect to see:
Annual management fees are the most common type of fee. Your annual management fees can either be a percentage charge of your entire pension pot each year or a fixed fee
Dealing charges are fees for buying and selling investments in your SIPP and are usually based on how often and how many times you make trades
Annual administration charges are part of some accounts, but not others. It’s either an annual flat fee or a percentage of your investment. You might see this being called a platform fee
Exit fees apply if you decide to transfer your SIPP to another SIPP provider. This could equate to a lot of money depending on how many shares you have, so check carefully
Drawdown charges apply when you start taking money from your SIPP. There could be an initial set-up fee, plus ongoing charges, so check before you choose your SIPP
Before you start investing in a SIPP, make sure you do your research to determine the charges that apply with each of the SIPP providers you're looking at.
SIPPs are usually managed online, but some can be managed by phone or post. You might have to pay more for one that isn’t managed online. All SIPP providers are different and have varying rules, so you need to check the details to find out exactly what you need to do.
Managing your self-invested pension online is usually the easiest option. It works like online banking: you can buy and sell investments and monitor their progress with the click of a button.
Once you’re 55, you’ll be able to take money from your SIPP, as with any pension. Alternatively, you can leave the money there until you need it.
A SIPP is the same as any other kind of pension in that you'll get income tax relief on the money you pay in. It’s a good way of protecting your money from the tax man.
When it's time to take the money out of your SIPP – on retirement or when you reach 55 – you can take 25% as a tax-free lump sum. You can choose how you receive the rest of your money but you’ll be taxed on it as income.
Not always. But if your new pension company allows transfers in, and your existing pension company allows transfers out, you might be in luck. You might be able to do a pension-to-SIPP transfer, although you could be charged for it.
When SIPP providers allow transfers in, it's called “in specie”. This means that you don't need to sell the individual investments in your pension when you change pensions. Instead, you can just move ownership of them to another company.
In specie contributions are when you transfer an asset from outside of a pension fund into your chosen company. Be aware that in specie contributions are rarely used. That's because issues often occur when transferring the actual value of each asset.
You can put as much money as you'd like into your pension to build funds for your retirement. However, there are limits on the amount you can get tax relief on.
While you're earning, you can put in 100% of your earnings up to a maximum of £40,000 each year and qualify for tax relief. Over that, you won't get tax relief.
If you're a high earner and bring in more than £240,000 a year, the amount you can put in that’s eligible for tax relief gradually reduces. For every £2 earned over £240,000, the amount you can contribute reduces by £1, until the annual allowance reaches £4,000.
If you're not earning money, you can still pay into a pension scheme and qualify to have tax relief added. You can put £2,880 a year into your pension and get tax relief of £720 added, which means you can add £3,600 a year to your pot.
There's also a lifetime allowance on your pension. For the current tax year this is £1,073,100. This allowance marks the maximum value of the pension benefits you can access without having to pay tax.
Most of the time, when you die, your SIPP would be inherited, tax-free, by your nominated beneficiaries.
If you die before you’re 75, your beneficiaries will get it as a tax-free lump sum.
If you die after you’re 75, things work a little differently. Your beneficiaries will be given three options on how they can take the money:
as a lump sum subject to their current income tax rate.
as a regular income subject to their current income tax rate. This option is only offered to dependents
as periodic lump sums subject to their current income tax rate
Usually when you reach 55. Check with your pension company as its SIPP terms and conditions may set a different age.
Yes, you can have more than one SIPP. If fact, many people have a SIPP or multiple SIPPs in addition to a workplace pension.
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See our full set of pensions guides here.
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Last updated: 6 April, 2022