Compare SIPP Providers

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What is a SIPP?

A self-invested personal pension, or SIPP, is a type of personal pension aimed at giving savers greater choice and control over their pension investments. Contributions into your SIPP ‘wrapper’ must still be held until you retire and can start taking an income from the funds you’ve built up. But rather than sitting back and simply letting a pension company make investment decisions on your behalf, a SIPP allows you to take full charge of your retirement planning, hence why they are also sometimes referred to as DIY pensions.

What are the different types of SIPPs?

There are two broad types of SIPP available in the market:

Full SIPP - providing access to the widest choice of investment options, full SIPPs are aimed primarily at experienced investors with larger pension funds. With a full SIPP, you’ll get access to more complex investments such as offshore funds, unquoted shares and property investment, which often means you’ll need to lean more heavily on the expertise of the SIPP provider when making your decisions and putting them into action. However, as this heightened level of support generally equates to higher charges, a full SIPP is only likely to be the best SIPP for you if you’re definitely going to take advantage of the non-standard investment options that are available.

Low cost SIPP - if you want more control over your pension, but don’t need the full range of investment choice that you get with a full SIPP, a low cost SIPP will often be more suitable. Less support and fewer investment options mean the fees tend to be lower with a low cost SIPP, and with minimum deposit requirements sometimes starting as low as £5,000, low cost SIPPs are generally more accessible too.

What’s the difference between a personal pension and a SIPP?

SIPPs are a type of personal pension, however the main difference between a SIPP and a standard personal pension is the added flexibility that a SIPP offers when it comes to deciding what you want to invest in.

With a traditional personal pension, you will typically choose from a range of pre-defined funds. The list of investment options may be relatively limited too.

But opt for a SIPP and a far wider investment choice should be available, giving you greater scope to try and grow your pension fund however you wish.

» MORE: Complete guide to pensions

How are SIPPs managed?

In line with the idea of giving you greater control over your pension saving, most SIPPs are managed online. This is especially true of low cost SIPPs, where the more standard nature of the investments available means you’re usually allowed to switch in and out of investments as you see fit, without your SIPP provider getting involved. If you do want extra support, and particularly if you’re utilising more complex investments via a full SIPP, some providers will offer phone and face-to-face support, but you should expect to pay more than if you have a SIPP that is managed entirely online.

What can you invest in through your SIPP?

The assets that it is possible to invest in with a SIPP include:

  • Individual stocks and shares (including quoted and unlisted, UK and overseas)
  • Investment trusts
  • Unit trusts
  • Open-ended investment companies (OEICs)
  • Structured products
  • Deposit accounts
  • Gilts and bonds
  • Traded endowment policies
  • Exchange traded funds (ETFs)
  • Real estate investment trusts (REITs)
  • Offshore funds
  • Commercial property.

However, be mindful that not all SIPPs will allow access to everything. So if you are looking for a particular investment take the time to compare SIPP provider options. There may also be other investments or assets not listed that a SIPP provider is willing to consider as a potential option, although you’ll need to approach a full SIPP provider to talk this through.

» MORE: Learn more about investment funds

Property investment with a SIPP

Many people are drawn to SIPPs because they provide the option to invest in bricks and mortar. However, there are lots of rules surrounding what you can and can’t do.

In particular, it’s not possible to directly hold residential property and enjoy the usual tax benefits associated with pension investing. Instead, you’ll need to find a SIPP that allows a collective investment such as a REIT as an investment option.

However, if you’re a business owner, a full SIPP may allow you to directly hold commercial property, such as your office, factory or shop, and provide you with valuable tax advantages.

Comparing SIPP charges

Making sure you compare SIPP charges between providers could mean considerable savings during the lifetime of a pension, but the wide range of fees that may be charged means it’s not always an easy task. Here are some of the main charges to be aware of:

Annual management fees - can be either a fixed charge or calculated as a percentage of your pension fund, and will be taken each year.

Investment fees - similar to annual management fees above but these will be the ongoing fees that relate to the specific investment held within your SIPP.

Dealing charges - are levied when you buy or sell investments, and will generally depend on how many - and the type of - transactions you make.

Exit fees - choose to transfer your SIPP elsewhere and your current SIPP provider may charge you for the privilege of selling your investments and the admin involved.

Drawdown fees - to withdraw funds from your SIPP when it’s time to retire you can often expect to pay fees to set up a drawdown arrangement and ongoing charges going forward.

Crucially, you’ll want to find a SIPP provider whose charges align best with your SIPP pension needs, as you only want to be paying fees on the services that you intend to use. For instance, full SIPP providers tend to charge higher fees in general and justify this by pointing to the greater levels of expertise, service and administration involved with managing the more specialist investment options that they offer. So if you’re not planning to invest in commercial property or unquoted shares, for example, you probably don’t need to pay the premium usually attached to a full SIPP, when a low cost SIPP is likely to offer all the investment options suitable to you.

When can you withdraw money from a SIPP?

The money you invest into a SIPP can only normally be accessed from age 55, and this is rising to age 57 from 2028.

At this point, you’re able to withdraw up to 25% of your fund as a tax-free cash lump sum, leaving the remaining 75% to secure an income. The income can be taken via income drawdown or by purchasing an annuity. You can also take one or more lump sum payments.

Reaching age 55 doesn’t mean you are obliged to start taking benefits from your SIPP, and there is no upper age limit to commence withdrawals. You’re also free to carry on working after you’ve started withdrawing your money.

The only way you can usually access your funds before age 55 is if you’re in seriously poor health or have a terminal illness. Some professions may also allow you to access pensions earlier, such as athletes.

SIPP tax relief explained

To incentivise people to save for their retirement, tax relief is available on a certain level of contributions you make into a pension, including SIPPs. How big a boost you receive is dependent on the income tax that you pay.

So basic rate taxpayers paying income tax at 20% are eligible for tax relief at 20% - this means if you put £80 into your SIPP pension, HMRC will effectively add a further £20 to make an overall contribution of £100.

Higher rate taxpayers paying income tax at 40% can get 40% tax relief, and additional rate taxpayers paying at 45% can get relief at 45%.

In the 2021/22 tax year, you’re able to enjoy tax relief on the lower of either 100% of your earnings or an annual allowance of £40,000.

» MORE: Learn how tax relief can boost your pension

Pros and cons of SIPPs

The upside of the best SIPPs are considerable if they are used in the right way, but equally there are disadvantages that anyone thinking about using a SIPP should be aware of too.

Advantages of a SIPP

  • Can provide access to a wide range of investments specific to your particular retirement aims.
  • Provides the freedom and flexibility to manage your pension exactly as you want.
  • You can receive pension tax relief on your contributions.
  • Can provide various flexible ways to draw an income at retirement, including income drawdown and through an annuity.
  • You may be able to pass on the residual value left in your SIPP without incurring inheritance tax when you die.
  • You can consolidate your other pensions together in a SIPP and make them easier to manage.

» MORE: Track down lost pensions

Disadvantages of a SIPP

  • SIPP fees are often more expensive than on other types of personal pension.
  • The responsibility for your pension lies squarely with you.
  • You’ll need a good knowledge of investing to make it work and time to research your ideas. You’ll need to regularly monitor your investments too.
  • Your pension investments cannot be accessed until you reach age 55 (or age 57 from 2028).
  • Tax relief is limited to the lower of 100% of your earnings or £40,000.

SIPP FAQs

How much can I pay into a SIPP each year?

You’re able to pay as much as you like into a SIPP in any given year, but should remember that there are restrictions on the tax relief that you’re eligible to receive. So in the current 2021/22 tax year, if you’re a UK taxpayer, you can get relief on contributions to the lower of either 100% of your annual earnings or a predetermined £40,000 annual allowance. Anything you put into your pension beyond this won’t receive pension tax relief, while there’s a lifetime allowance, which currently stands at £1,073,100, to be aware of too - exceed this and a tax penalty is coming your way.

If you’re a non-taxpayer, because you have no or too little earnings, you can still make contributions into a SIPP and qualify for tax relief at 20% on payments of up to £2,880 each tax year. With the relief, your pension will be receiving an overall contribution of £3,600 a year.

If you have more than one pension that you pay into, it’s important to note that the pension tax relief limits apply to individuals, rather than individual pension schemes.

Can I transfer my SIPP?

Yes, you can transfer a SIPP to another SIPP with a different provider, or potentially another type of pension scheme. You may consider transferring if you’re not happy with the current service you’re receiving, or if another provider is offering an investment option you want to pursue. Alternatively, if you compare SIPP fees carefully, you might have noticed that SIPP charges are lower elsewhere.

However, pension transfers can be complicated, particularly if you have non-standard investments as part of your SIPP, so it’s probably best to seek out professional financial advice first. There might also be exit fees to pay when you transfer out which could easily cancel out any fee savings you’re hoping to make.

» MORE: Learn more about pension transfers

How does a SIPP compare to a workplace pension?

If your workplace pension is a traditional personal pension or stakeholder pension, then a SIPP is likely to offer you more investment options and greater control over how you manage your pension, but will probably have higher fees too. Or if you have a defined benefit or final salary scheme through your work, these tend to offer less flexibility in comparison (but can still prove highly valuable nonetheless).

However, if your employer is offering a workplace SIPP, which some companies do, then there is likely to be very little difference to a SIPP that you arrange yourself. It’s possible that fees will be a little cheaper with a workplace SIPP if your employer has negotiated a discount with the SIPP provider in return for selecting the scheme for its employees.

Employers will pay into a workplace SIPP that they offer in the usual way, but won’t usually pay into any personal SIPP that you might have.

Can a SIPP be inherited?

Yes, a SIPP can be inherited by your beneficiaries, and should you die before taking any retirement benefits, the fund will usually be passed on tax-free.

However, your age when you die is also important in determining exactly what options your beneficiaries have.

  • If you die before age 75, they can take the entire SIPP fund as a tax-free lump sum.

  • If you die after age 75, they can either take:

    • the fund as a lump sum, but must pay income tax on it at their marginal rate.
    • a regular income from the fund, but will need to pay income tax on this at their marginal rate.
    • lump sums periodically, and pay income tax at their marginal rate when they are taken.

» MORE: What happens to a pension when you die

Are SIPPs safe?

If your provider is authorised and regulated by the Financial Conduct Authority (FCA) you may be covered by the Financial Services Compensation Scheme (FSCS), which means that you may be entitled to compensation should the provider or the firm holding your pension investments goes bust. The same way pensions are complex products so is the protection offered on them to consumers, and these can vary greatly depending on who your provider is and how they hold your funds. Please check the FSCS website for full details of what is covered.

It's important to stress that even though there may be a certain level of protection for a company becoming insolvent, there is no protection if your investments simply lose value.

» MORE: Learn how the FSCS protects your money

Are SIPPs cheap?

Relative to other forms of personal pension, you can usually expect fees to be higher for a SIPP. Of the two broad SIPP options, low cost SIPPs should be the cheapest, as they generally offer more straightforward investment options than full SIPPs, and not the options that are most costly to advise on, implement and manage, such as commercial property.

Whichever type of SIPP you’re interested in, taking the time to compare SIPP fees should always be a priority.

Can I have more than one SIPP or in addition to another type of pension?

Yes, you can have more than one SIPP, and if you’re enrolled in a workplace pension or have other pensions, it’s okay to have a SIPP alongside these too.

Can I open a SIPP for my child?

Yes, you can open a SIPP for your child, and manage it on their behalf until they reach the age of 18. Known as Junior SIPPs, these pensions work in the same way as a normal SIPP, and are a great way to give your youngster a head start when it comes to saving for their retirement. The maximum amount that can be paid into a Junior SIPP each year is capped at £2,880, but will equate to an overall sum of £3,600 once tax relief (at 20%) is applied.

» MORE: Learn about children’s pensions

About the author

Tim Leonard
Tim draws on 20 years’ experience at Moneyfacts, Virgin Money and Future to pen articles that always put consumers’ interests first. He has particular expertise in mortgages, pensions and savings. Read more

Compare personal pension providers

3 providers found

The value of a pension can rise and fall, as such your capital is at risk and you may get back less than you invest. Past performance is no guarantee of future results. Standard pension rules apply.

  • Interactive Investor logo

    Interactive Investor

    • Min Investment
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  • Fidelity logo

    Fidelity SIPP (Self-Invested Personal Pension)

    • Min Investment
      Lump sums: £800
      Monthly: £20
      Transfers: £1,000
    • Investment Type
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    • Annual Fees
      Up to 0.35%
      Other fees may apply*
    • Open or Transfer
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    • Access
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  • Hargreaves Lansdown logo

    Hargreaves Lansdown

    • Min Investment
      Lump sums: £100
      Monthly: £25
      Transfers: £1,000
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    • Annual Fees
      Up to 0.45%
      Other fees may apply
    • Open or Transfer
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    • Access
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This table is initially ranked by commercial agreements in place with the providers. This does not constitute advice or recommendation for any firm featured. The table can be reordered A-Z.

A firm's Annual Fee alone is not representative of the total fees you will incur. Fee structures between providers vary greatly. Some bundle their investment costs with the annual fee they charge, whilst for others this is separate. Other providers charge a fixed fee or may charge on a percentage amount. Percentage based fees can be impacted by tiering where you receive a discount on the fee charged on a portion of your balance in excess of a predefined threshold. You should always check the fees that will be charged based on your own situation and investment choice.

Nerdwallet UK does not provide advice or recommendations in respect of the suitability of pensions or firms that operate within the pensions sector. The content of this page is simply informative and presented to give you an overview of a selection of firms that may be able to help further regarding pensions requirements, depending on your personal circumstances.

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