What Is a SIPP? Guide to Self Invested Personal Pensions
Jennifer Birtles
20th Mar 2025
A Self-Invested Personal Pension (SIPP) is a powerful, tax-efficient retirement savings account that puts you in control of your investments. Unlike traditional workplace pensions, a SIPP is self-funded, meaning you decide how much to contribute and where to invest your money.
If you’re looking for a flexible way to build your retirement pot while enjoying tax advantages, a SIPP could be a great option. In this guide, we’ll cover everything you need to know about SIPPs, including how they work, who they’re best suited for, and how to start investing.
What is a SIPP?
A Self-Invested Personal Pension (SIPP) is a type of pension wrapper that allows individuals to manage their own retirement investments. Unlike traditional personal pensions, which are often restricted to a limited selection of funds, SIPPs offer a much broader range of investment choices. This flexibility can potentially lead to greater returns over the long term—if managed wisely.
Types of Investments Allowed in a SIPP
SIPPs give investors access to a wide variety of assets, including:
- Stocks and Shares: Invest in individual company shares.
- Unit Trusts & Open-Ended Investment Companies (OEICs): Professionally managed investment funds.
- Investment Trusts: Pooled investments that are traded like shares.
- Corporate & Government Bonds: Fixed-income investments.
- Cash: Hold cash within your SIPP for flexibility.
- Commercial Property: Invest in business properties, such as offices or warehouses.
The ability to diversify across different asset types makes SIPPs an attractive choice for experienced investors looking to build a well-balanced pension portfolio.
Is a SIPP Right for You?
SIPPs are best suited for individuals who:
- Have experience with investing and are comfortable making financial decisions.
- Want greater control over their retirement savings.
- Are willing to actively manage their investments or work with an advisor.
- Have a sizable pension pot or plan to make significant contributions.
Things to Consider Before Opening a SIPP
While SIPPs offer great flexibility, they come with responsibilities:
- Investment risk: Your retirement savings depend on how well your investments perform.
- Time commitment: You’ll need to review and manage your investments regularly.
- Fees & charges: SIPPs can have higher costs than traditional pensions, so it’s essential to compare providers.
If you prefer a hands-off approach, a traditional personal pension with professionally managed funds might be a better fit.
How to Start Investing in a SIPP
Setting up and managing a SIPP isn’t as complicated as it sounds. Here’s how to get started:
1. Choose a SIPP Provider
There are many SIPP providers available, each with different fees and features. Some top providers include:
| SIPP Provider | Anual Management Fees | Admin Fees | Minimum Deposit | |
|---|---|---|---|---|
| Invest Engine | 0.25% (for managed portfolios only) | Zero | £100 | Learn More |
| Interactive Investor | £5.99 monthly fee | Included in the £5.99 monthly fee | £10,000 | Learn More |
| Hargreaves Lansdown | From 0.1% | From £0 | £100 | Learn More |