Our Pick Of The Best SIPP Providers

Forbes Staff

Updated: Nov 8, 2023, 3:10pm

Kevin Pratt
Editor

Reviewed By

Important Disclosure: The content provided does not consider your particular circumstances and does not constitute personal advice. Some of the products promoted are from our affiliate partners from whom we receive compensation.

If you require any personal advice, please seek such advice from an independently qualified financial advisor. While we aim to feature some of the best products available, this does not include all available products from across the market. Although the information provided is believed to be accurate at the date of publication, you should always check with the product provider to ensure that information provided is the most up to date.

Capital at Risk. All investments carry a varying degree of risk and it’s important you understand the nature of the risks involved. The value of your investments can go down as well as up and you may get back less than you put in.

Where we promote an affiliate partner that provides investment products, our promotion is limited to that of their listed stocks & shares investment platform. We do not promote or encourage any other products such as contract for difference, spread betting or forex. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

Self-Invested Personal Pensions (SIPPs) are of interest for individuals seeking to put money aside for retirement, while others may be considering such a pension as a means of passing on wealth given the freeze on inheritance tax thresholds.

To help with this, we’ve carried out research on our pick of the best SIPP providers on the market, including fees, choice of investments and level of customer support.

Meanwhile, we look in more detail at investing in pensions in our frequently asked questions below.

Tax treatment depends on one’s individual circumstances and may be subject to future change. The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of tax advice.

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Our Pick Of The Best SIPP Providers

We researched a range of providers and have listed our findings below, together with a methodology explaining how we arrived at our rankings.


BEST ALL-ROUNDER

AJ Bell

AJ Bell
5.0
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.

Trading fee

Funds: £1.50. Shares: £5, £3.50 (10+ deals in previous month).

Platform fee

Funds: 0.25% (up to £250,000), 0.10% (£250,000 to 500,000), no charge (£500,000 plus). Shares: 0.25% (capped at £3.50 per month). (Tiered).

Customer experience rating

71%

AJ Bell

Trading fee

Funds: £1.50. Shares: £5, £3.50 (10+ deals in previous month).

Platform fee

Funds: 0.25% (up to £250,000), 0.10% (£250,000 to 500,000), no charge (£500,000 plus). Shares: 0.25% (capped at £3.50 per month). (Tiered).

Customer experience rating

71%

Why We Picked It

AJ Bell is a FTSE 250 company with over 490,000 clients. Other accounts include a general investment account, ISA, Lifetime ISA and Junior ISA.

Charges a small trading fee for buying funds and mid-range trading fees for buying shares online. However, one of the lowest platform fees (of up to 0.25%) and the platform fee for shares is capped at £3.50 per month. Pays interest on cash balances.

No charge for transferring pensions in or out of AJ Bell. No fee for flexi-access drawdown or lump sum payments.

Choice of over 8,200 shares and 7,500 funds, ETFs and investment trusts. Offers nine AJ Bell ready-made managed portfolios and six non-managed portfolios, together with a ‘Favourite Funds’ list of around 80 selected funds.

Comprehensive research offering for both funds and shares along with a range of investing guides and live seminars.

Can trade online, by app or by phone. Minimum lump-sum investment from £500 or £25 for monthly investing (with a reduced trading fee of £1.50).

Extensive customer support available, including a 6-day-a-week telephone service and live chat facility.

Overall, AJ Bell is an excellent all-rounder with one of the lowest platform fees for funds among the mainstream providers and an extensive research offering.

Pros & Cons
  • One of lowest platform fees
  • Platform fee for shares capped
  • No transfer or drawdown fees
  • Comprehensive research offering
  • Extensive customer support
  • Mid-range trading fee for shares
  • Trading fee charged on funds
Typical fees

Portfolio of £20,000: £89

Portfolio of £100,000: £206

BEST FOR HIGH-VALUE PORTFOLIOS

interactive investor

interactive investor
5.0
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.

Trading fee

Funds and shares: £3.99 for UK shares and funds and US shares and £9.99 for other international shares.

Platform fee

Flat fee of £5.99 per month for Pension Essentials plan (up to £50,000) or £12.99 per month for Pension Builder plan (above £50,000).

Customer experience rating

65%

interactive investor

Trading fee

Funds and shares: £3.99 for UK shares and funds and US shares and £9.99 for other international shares.

Platform fee

Flat fee of £5.99 per month for Pension Essentials plan (up to £50,000) or £12.99 per month for Pension Builder plan (above £50,000).

Customer experience rating

65%

Why We Picked It

interactive investor is owned by fund management group abrdn and has over 400,000 customers. Other accounts include a general investment account, ISA and Junior ISA.

Customers with pension pots of less than £50,000 will pay £5.99 on the Pension Essentials plan, or £12.99 per month for the Pension Builder plan (for pots over £50,000). Alternatively, existing customers on the Investor or Super Investor plans can add a SIPP for £10 a month. Existing customers on the Investor Essentials plan can add a SIPP for £5 per month (with a limit of £75,000 across the ISA and SIPP).

Charges a high trading fee for funds but one of the lower trading fees for UK and US shares. However, customers adding a SIPP to either the Investor or Super Investor plans can use the free monthly trade(s) for their SIPP.

Fixed, rather than proportional, platform fee may appeal to investors with higher-value portfolios.

No charge for transferring pensions in or out of ii. No drawdown fees.

Choice of over 40,000 investment options, including over 4,600 funds, ETFs and investment trusts. Pays interest on cash balances held .

Offers five ready-made portfolios, along with a ‘Super 60’ list of selected funds. It does not offer financial advisory services but provides comprehensive fund and share research.

Can trade online, by app or by phone. No minimum lump-sum investment amount and £25 for monthly investing (no trading fee for monthly investing).

Good support available, including a 5-day-a-week telephone service and messaging facility.

Overall, interactive investor may appeal to investors with higher-value portfolios due to the flat platform fee, in addition to the wide range of investments offered.

Pros & Cons
  • Flat platform fee
  • Low trading fee for UK & US shares
  • No transfer or drawdown fees
  • Comprehensive research offering
  • Good customer support
  • Trading fee charged on funds
  • Platform fee expensive for small portfolios
Typical fees

Portfolio of £20,000: £120 (Pension Essentials plan)

Portfolio of £100,000: £204 (Pension Builder plan)

Bestinvest

Bestinvest
4.5
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.

Trading fee

Funds: no charge. Shares: £4.95, no charge for US shares.

Platform fee

Ready-made portfolios and US shares: up to £500,000: 0.20%, £500,000 to £1 million: 0.10%, over £1 million: no charge. Other investments: Up to £250,000: 0.40%, £250,000 to £500,000: 0.20%, £500,000 to £1 million: 0.10%, over £1 million: no charge. Minimum of £120 per year (both options). (Tiered)

Customer experience rating

58%

Bestinvest

Trading fee

Funds: no charge. Shares: £4.95, no charge for US shares.

Platform fee

Ready-made portfolios and US shares: up to £500,000: 0.20%, £500,000 to £1 million: 0.10%, over £1 million: no charge. Other investments: Up to £250,000: 0.40%, £250,000 to £500,000: 0.20%, £500,000 to £1 million: 0.10%, over £1 million: no charge. Minimum of £120 per year (both options). (Tiered)

Customer experience rating

58%

Why We Picked It

Bestinvest is owned by wealth management firm Evelyn Partners (previously Tilney Smith & Williamson) and has over 50,000 clients. Other accounts include a general trading account, ISA and Junior ISA.

Charges no trading fee for funds and one of the lowest share trading fees. However, one of the highest platform fees for funds and no cap on platform fee for shares. Minimum platform fee of £120 per year for SIPPs. Pays interest on cash balances.

No charge for transferring pensions in or out of Bestinvest. No drawdown fees.

Choice of over 1,400 shares (UK and US only) and 2,200 funds, ETFs and investment trusts.

Offers 20 ready-made portfolios, along with ‘The Best™ Funds List’ of around 130 funds, ETFs and investment trusts. Bestinvest also charges a lower platform fee for its ready-made portfolios (and US shares).

Also offers a financial advisory service including a free one-to-one coaching session. Provides comprehensive fund and share research.

Can trade online, by app or by phone. No minimum for lump-sum investments and £50 for monthly investing (no trading fee for monthly investing).

Extensive support available, including a 6-day-a-week telephone service and live chat facility.

Overall, Bestinvest may appeal to investors wanting a low-cost, ready-made portfolio, along with financial coaching. However, it offers a more limited selection of shares relative to other providers.

Pros & Cons
  • No trading fee for funds & US shares
  • Low trading fee for UK shares
  • No transfer or drawdown fees
  • High interest rate on cash balances
  • Good research offering
  • High platform fee of up to 0.40%
  • No cap on platform fee for shares
  • One of lower customer experience ratings
Typical fees

Portfolio of £20,000: £110

Portfolio of £100,000: £430

Hargreaves Lansdown

Hargreaves Lansdown
4.5
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.

Trading fee

Funds: no charge. Shares: £11.95 (0-9), £8.95 (10-19), £5.95 (20+). Based on trades in previous month

Platform fee

Funds: 0.45% (up to £250,000), 0.25% (£250,000 to £1 million), 0.10% (£1 million to £2 million), no charge (£2 million plus). Shares: 0.45% (capped at £200 per year). (Tiered).

Customer experience rating

66%

Hargreaves Lansdown

Trading fee

Funds: no charge. Shares: £11.95 (0-9), £8.95 (10-19), £5.95 (20+). Based on trades in previous month

Platform fee

Funds: 0.45% (up to £250,000), 0.25% (£250,000 to £1 million), 0.10% (£1 million to £2 million), no charge (£2 million plus). Shares: 0.45% (capped at £200 per year). (Tiered).

Customer experience rating

66%

Why We Picked It

Hargreaves Lansdown is a FTSE 100 company with over 1.7 million clients. Other accounts include a general investment account, ISA, Lifetime ISA and Junior ISA.

No trading fee for funds but one of the highest share trading fees. Also one of the highest platform fees (of up to 0.45%) although platform fee for shares is capped at £200 per year. Pays interest on cash balances.

No charge for transferring pensions in or out of HL. No drawdown fees.

Choice of over 8,500 shares and nearly 5,000 funds, ETFs and investment trusts.

Offers four ready-made portfolios, along with a ‘Wealth Shortlist’ of over 70 selected funds. Also offers a financial advisory service.

Comprehensive research offering for both funds and shares.

Can trade online, by app or by phone. Minimum lump-sum investment from £100 or £25 for monthly investing (with reduced trading fee of £1.50).

Extensive support available, including a 6-day-a-week telephone service and secure messaging facility.

Overall, HL may be a good option for investors willing to pay for a premium service, with an excellent choice of investments, research offering and customer service.

Pros & Cons
  • No trading fee for funds
  • Platform fee for shares capped
  • Comprehensive research offering
  • Excellent customer support
  • High trading fee for shares
  • High platform fee of 0.45% (under £250,000)
Typical fees

Portfolio of £20,000: £162

Portfolio of £100,000: £497

Aviva

Aviva
4.5
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.

Trading fee

Funds: no charge. Shares: £7.50.

Platform fee

First £50,000: 0.40%, next £200,000: 0.35%, next £250,000: 0.25%, over £500,000: no charge. (Tiered). Platform fee for any shares, ETFs and investment trusts capped at £120 per year.+

Customer experience rating

63%

Aviva

Trading fee

Funds: no charge. Shares: £7.50.

Platform fee

First £50,000: 0.40%, next £200,000: 0.35%, next £250,000: 0.25%, over £500,000: no charge. (Tiered). Platform fee for any shares, ETFs and investment trusts capped at £120 per year.+

Customer experience rating

63%

Why We Picked It

Aviva is a FTSE 100 insurance group with over 18 million customers.

Charges a mid-range share trading fee, although there is no trading fee for funds. One of the higher platform fees of up to 0.40% although this is capped at £120 per year for shares and ETFs. Pays interest on cash balances.

No charge for transferring pensions in or out of Aviva. No drawdown fees.

Choice of over 800 shares and around 5,000 funds, ETFs and investment trusts.

Choice of five ready-made portfolios. along with an ‘Experts’ Shortlist’ list of around 85 selected funds. Also provides financial advisory services and a decent range of investment guides.

Can only trade online although portfolio can be viewed on the app. Minimum lump-sum investment from £5,000 (reduced to £1,000 if monthly investing as well) or £25 for monthly investing (with a reduced trading fee of £2).

Support includes a 5-day-a-week telephone service, in addition to email.

Overall, Aviva is a good all-rounder with competitive fees and a decent range of investments.

Pros & Cons
  • No trading fee for funds
  • Platform fee for shares capped
  • No transfer or drawdown fees
  • High interest rate on cash balances
  • One of higher platform fees
  • Cannot trade by app
Typical fees

Portfolio of £20,000: £125

Portfolio of £100,000: £353

Fidelity

Fidelity
4.5
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.

Trading fee

Funds: No charge. Shares: £7.50.

Platform fee

Up to £25,000: 0.35% (regular savings plan) or £90 (no regular savings plan). Between £25,000 to £249,999: 0.35%. Between £250,000 to £999,999: 0.20%, Over £1 million: 0.20% on first £1 million then no further charge. Capped at £90 per month for exchange-traded instruments. (Non-tiered).

Customer experience rating

63%

Fidelity

Trading fee

Funds: No charge. Shares: £7.50.

Platform fee

Up to £25,000: 0.35% (regular savings plan) or £90 (no regular savings plan). Between £25,000 to £249,999: 0.35%. Between £250,000 to £999,999: 0.20%, Over £1 million: 0.20% on first £1 million then no further charge. Capped at £90 per month for exchange-traded instruments. (Non-tiered).

Customer experience rating

63%

Why We Picked It

US fund giant Fidelity has 1.5 million clients in the UK. Unlike many of its fund manager peers, clients can trade in whole-of-market, rather than just Fidelity investments. Other accounts include a general trading account, ISA and Junior ISA.

Charges no trading fee for funds but one of the higher share trading fees. Has a non-tiered platform fee (meaning that the lower platform fee is charged across the whole portfolio, rather than a different fee for each tier). Platform fee is capped at £90 (per year) for exchange-traded instruments. Pays interest on cash balances held.

No charge for transferring pensions in or out of Fidelity. No drawdown fees.

Choice of over 2,000 shares and 3,800 funds, ETFs and investment trusts.

Offers 13 ready-made portfolios, along with a ‘Select 50’ list of selected funds, ETFs and investment trusts. Also provides financial advisory services and a good level of fund and share research.

Can trade online, by app or by phone. It has a high minimum investment of £1,000, but a lower amount of £25 for monthly investing (with a reduced trading fee of £1.50).

Extensive support available, including a 5-day-a-week telephone service, messaging facility and face-to-face investor centre in London.

Overall, Fidelity may appeal to investors with higher-value portfolios due to the non-tiered platform fee, but is a more expensive option for trading and holding shares.

Pros & Cons
  • No trading fee for funds
  • Non-tiered platform fee
  • No transfer or drawdown fees
  • Comprehensive research offering
  • Excellent customer support, including face-to-face investor centre
  • High platform fee of up to 0.35%
  • High minimum investment of £1,000 (unless investing monthly)
Typical fees

Portfolio of £20,000: £135

Portfolio of £100,000: £310

Halifax

Halifax
4.5
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.

Trading fee

£9.50, no fee for international shares.

Platform fee

£22.50 per quarter (up to £50,000), £45 per quarter (above £50,000).

Customer experience rating

72%

Halifax

Trading fee

£9.50, no fee for international shares.

Platform fee

£22.50 per quarter (up to £50,000), £45 per quarter (above £50,000).

Customer experience rating

72%

Why We Picked It

Halifax is owned by Lloyds Bank, a FTSE 100 company. The SIPP is administered by investment platform AJ Bell. Other accounts include a general trading account and ISA.

Choice of over 4,900 shares, 2,700 funds, 640 ETFs, and 290 investment trusts.

Charges one of the higher share trading fees, although this is waived for international shares. Fixed, rather than proportional, platform fee may appeal to investors with higher-value portfolios. Pays interest on cash balances held.

Charge of £60 for transferring pensions into Halifax (capped at £300) but no fee to transfer out. Fee of £180 per year for flexi-access drawdown.

Does not offer a ready-made portfolio but customers can choose from over 60 “Select Funds” selected by third party FE fundinfo.

Provides a basic level of research.

Can trade online, by the banking app or by phone. Minimum lump-sum investment from £100 or £50 for monthly investing (with a reduced trading fee of £2).

Support includes a 5-day-a-week telephone service, in addition to live chat and secure messaging facilities.

Overall, Halifax may appeal to existing Halifax customers wanting to hold their accounts with one provider.

Pros & Cons
  • Non-tiered platform fee
  • No trading fee on international shares
  • Trading fee charged on funds
  • Platform fee expensive for small portfolios
  • Fee for transfers-in
  • Fee for drawdowns
Typical fees

Portfolio of £20,000: £204

Portfolio of £100,000: £294

Close Brothers

Close Brothers
4.0
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.

Trading fee

Funds: no charge. Shares: currently no charge (otherwise may be up to £8.95).

Platform fee

Annual admin fee of £150 plus VAT plus platform fee of 0.25% (up to £500,000), 0.20% (£500,000 to £1.5 million), 0% (above £1.5 million). (Tiered).

Customer experience rating

n/a

Close Brothers

Trading fee

Funds: no charge. Shares: currently no charge (otherwise may be up to £8.95).

Platform fee

Annual admin fee of £150 plus VAT plus platform fee of 0.25% (up to £500,000), 0.20% (£500,000 to £1.5 million), 0% (above £1.5 million). (Tiered).

Customer experience rating

n/a

Why We Picked It

Close Brothers is a FTSE 250 merchant bank, with over three million customers.

There is no trading fee for funds and it charges one of the lower platform fees, however, additional annual administration fee of £150 (plus VAT). Pays interest on cash balances held.

No charge for transferring pensions in or out of Close. Fee of £50 (plus VAT) for setting up drawdown.

Choice of over 1,000 shares, in addition to 2,400 funds, 80 ETFs and 220 investment trusts.

Choice of 15 ready-made portfolios. along with an ‘Discovery Shortlist’ list of selected funds. Also provides financial advisory services and a decent level of market analysis.

Can trade online or view SIPP portfolio by app. No minimum for lump-sum investment and £50 for monthly investing.

Support includes a 5-day-a-week telephone service, in addition to an email facility.

Overall, Close may appeal to investors wanting to trade shares regularly due to the zero trading fee. However, the annual administration fee means that the overall platform fee is at the higher end.

Pros & Cons
  • No trading fees
  • No transfer fees
  • No drawdown fees
  • One of higher platform fees
  • Cannot trade by app
  • Low interest rate on cash
Typical fees

Portfolio of £20,000: £230

Portfolio of £100,000: £430

Methodology

To come up with our list of best SIPP providers, we applied three main criteria. Our focus was on whether providers:

  • charged competitive trading and platform fees
  • offered a wide range of investments from third parties
  • scored a star rating of at least three by research firm Fairer Finance

We also considered other features such as the range of investments on offer and whether ‘ready-made’ portfolios were available. We’ve also listed each provider’s customer experience score, as determined by Fairer Finance.

We asked whether interest was paid on uninvested cash balances and considered the options for trading (online or by app), the level of customer support and the quality of research on offer.

In addition, we checked whether the provider was authorised by the Financial Conduct Authority (FCA), the UK’s financial watchdog. Using FCA data, we also reviewed customer complaints levels.

Combining the above with editorial judgment, we arrived at our Forbes Advisor star ratings.


What assumptions did we use?

We calculated trading and platform fees based on the following assumptions:

  • portfolio value: £20,000 and £100,000
  • portfolio split: 50% funds, 50% UK shares
  • frequency of trading: 12 trades a year split equally between funds and UK shares

What is a SIPP?

A self-invested personal pension (SIPP) is a pension ‘wrapper’ that allows individuals to build up a pot of money for retirement.

It’s a type of personal pension which gives more flexibility over the types of investments than a standard pension which tends to offer a set of pre-selected funds.

According to research by the Financial Services Compensation Scheme (FSCS), the main reasons for investing in a SIPP are as follows:


How do SIPPs work?

SIPPs work in a similar way to ISAs, with investors choosing where their money is invested, often via a DIY investment platform. As with ISAs, any income or capital gains from investments held in a SIPP is tax-free.

However, unlike ISAs, investors receive tax relief on their contributions into a SIPP. This varies from 20% (for non and basic-rate tax-payers) up to 40-45% (for higher-rate tax-payers), subject to certain limits – find out more in “How much can be paid into a SIPP each year?”


What are the different types of SIPPs?

There are two main types of SIPPs, typically known as ‘full service’ and ‘low-cost’ SIPPs.

Full service SIPPs allow individuals to hold more specialist assets, such as property and unquoted investments, in addition to mainstream equity-based investments. Advice is tailored to the individual client and, as a result, fees are higher.

Low-cost SIPPs offer a lower-fee option for individuals who are comfortable choosing their own investments without financial advice. These are provided by many of the mainstream investment platforms such as AJ Bell and interactive investor.


What types of investments can be held in a SIPP?

This depends on the type of SIPP but common investments include:

It’s also possible to hold property in some SIPPs. This is typically commercial property although individuals can also invest in residential property through a Real Estate Investment Trust (REIT).


What fees are charged on SIPPs?

There are various types of fees charged by SIPP providers:

Trading fee

This is a flat fee charged by the SIPP provider when individuals buy or sell investments. Some SIPP providers do not charge for trading shares, while others charge a fee of £5 to £10 per share trade. Many SIPP providers do not charge for buying or selling funds.

Platform fee

This is an annual fee charged for holding the shares and funds in the SIPP. Some providers charge no fee for this, others charge a flat fee and some charge a percentage, typically 0.25% to 0.45%, of the value of a portfolio.

These fees will usually be taken out of any cash held on account. Alternatively, fees can be paid directly by debit card. Where fees remain unpaid, a provider is likely to sell a proportion of a customer’s investments as a last resort.

It’s also worth looking at the types of investments that incur a platform fee as some providers charge for holding funds, but not for shares. Where a platform fee is charged for holding shares, this is sometimes capped at a maximum amount, generally around £150-200 per year.

There are two types of percentage-based platform fees:

  1. Tiered fee: this is the most usual type of platform fee, whereby individuals pay different fees on different ‘slices’ of a portfolio. For example, for a portfolio worth £400,000, individuals might pay 0.45% on the first £250,000, then 0.25% on the next £150,000.
  2. Non-tiered fee: a small number of providers (such as Fidelity) charges a non-tiered fee, whereby the same fee is paid across the whole portfolio. For example, with a portfolio of £400,000, 0.2% is applied to the whole £400,000.

Annual management fee

This is charged by the manager of the underlying investment for funds, investment trusts and exchange-traded funds.

Actively-managed funds typically charge an annual management fee of 0.5% to 1.0%, compared to 0.1% to 0.3% for passively-managed (tracker-type) funds.

Drawdown fees

These apply when individuals start withdrawing money from their SIPP. Drawdown fees can include an initial set-up fee, in addition to an annual administration charge (which may be flat or percentage-based).

Other fees

Some of the providers charge other fees, including fees for transferring SIPPs between providers and fees for trading by telephone.

For individuals who buy or sell shares denominated in a currency other than pounds sterling, nearly all of the providers charge a foreign exchange fee. This is also referred to as a foreign currency conversion fee and typically varies from 0.5% to 1.5%. Some providers also charge a higher trading fee for overseas shares.

Some providers may also charge an early closure fee when the SIPP balance falls below a certain level and the SIPP is not closed due to a transfer out or purchase of an annuity.

Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.


What are the benefits of a SIPP?

  • Any UK resident under 75 can open one, irrespective of whether they also have a workplace or other private pension scheme.
  • SIPPs can be used to consolidate other pensions in one place.
  • Individuals receive tax relief on their pension contributions, usually at least 20%, and up to the highest rate of income tax paid (subject to certain limits).
  • Individuals have the flexibility to choose their own investments, such as shares and funds, rather than being limited to a set of pre-selected investments.
  • Investments held in SIPPs are free from income and capital gains tax (while they remain within the SIPP).
  • Up to 25% of the SIPP can usually be withdrawn as a tax-free lump sum.
  • Investors can often hold their SIPP with the same provider as their ISA and general investment account, which may be easier to manage.

What are the drawbacks of a SIPP?

  • Fees are charged on SIPPs, which can vary significantly between providers.
  • Not all individuals have the financial expertise to choose their own investments and, as with other investments, they may lose some, or all, of their money.
  • The money can’t be accessed until 55 (rising to 57 by 2028), unlike other forms of tax-efficient investments such as an Individual Savings Accounts (ISAs).
  • After taking the 25% tax-free lump sum, individuals will typically have to pay income tax on withdrawals from the SIPP (above their personal allowance).
  • The lifetime allowance may be reinstated in the future, meaning that individuals are taxed on any excess above this amount.

Frequently Asked Questions (FAQs)

How much can be paid into a SIPP each year?

Individuals can pay 100% of their earnings into a SIPP each tax year, subject to the annual allowance (£60,000 in the current 2023/24 tax year).

There is a tapering of the annual allowance for people earning over £200,000 a year. The annual allowance is reduced by £1 for every £2 of ‘adjusted income’ (which includes bonuses and employer pension contributions) above £260,000, subject to a minimum allowance of £10,000.

However, individuals also have the option to carry forward unused annual allowances from the last three tax years, subject to certain conditions. This can allow them to receive tax relief on pension contributions that exceed the annual allowance.

Tax-relief will be received on pension contributions, depending on the highest rate of income tax paid by an individual:

  1. Basic-rate (20%) tax-payers would need to contribute £8,000 to make an overall contribution of £10,000 to their pension, with the government topping up their contribution by £2,000.
  2. Higher-rate (40%) tax-payers would only need to contribute £6,000, with the government topping-up their contribution by £4,000.
  3. Additional-rate (45%) tax-payers would need to contribute £5,500, with the government contributing £4,500.
  4. Basic-rate tax relief is claimed by the pension provider and automatically added to the pension. Higher-rate tax-payers will have to claim the additional tax-relief through their annual return or by contacting their tax office.

Non tax-payers are also able to receive basic-rate tax-relief on SIPP contributions. They can make SIPP contributions of up to £2,880 a year, which the government tops up to £3,600. Children can benefit from the same tax-relief on contributions into Junior SIPPs.

Who offers SIPPs?

A number of the mainstream investment platforms offer SIPPs, including Hargreaves Lansdown, AJ Bell and interactive investor. These offer a wide range of investments, although a few platforms, such as Vanguard, only offer their own funds.

Another option is robo-adviser platforms, such as Nutmeg and Wealthify, which we cover in more detail in our pick of the best robo-adviser platforms. Robo-advisers choose an investment portfolio for individuals, based on their financial goals and attitude to risk.

How can a SIPP be opened?

Most of the SIPPs offered by the mainstream providers can be opened online or over the phone.

However, individuals with a limited understanding of the stock market should consider consulting an independent financial advisor before opening a product of this sort. Bear in mind that advisors will charge a fee for their services, which they should disclose upfront.

What’s a ‘defined contribution’ scheme?

A SIPP is a type of ‘defined contribution’ scheme, meaning that individuals build up a pot of money which they can choose to take in various ways on retirement.

This differs from a ‘defined benefit’ or ‘final salary’ scheme which pays out an annual income on retirement. Many of these schemes have been phased out by employers over the last decade.

Can an employer make payments to a SIPP?

Employers can choose to pay into a SIPP but this is rare. Instead, employers offer workplace pension schemes as an alternative to SIPPs under auto-enrolment rules.

If an employer is willing to contribute to a SIPP, they will typically ask employees to match their contributions.

Can cash be held in SIPPs?

Yes. Individuals may hold cash in their SIPP when they want to use their annual allowance in a tax year but wait to invest the cash at a later point. All of our featured providers pay interest on uninvested cash held in SIPPs.

Can other pensions be transferred into SIPPs?

Other pensions can typically be transferred into SIPPs (as with ISAs). However, individuals should check with their existing provider that they will not be losing any valuable benefits or guarantees and the cost of any exit fees.

Additional rules apply for the transfer of certain ‘final salary’ or ‘defined benefit’ schemes into a SIPP, whereby advice must first be sought from a qualified financial advisor.

However, pensions are a complex area and it’s worth seeking financial advice before deciding to make any transfers into a SIPP.

What happens to SIPPs on retirement?

There are different options available on retirement, which can be ‘mixed and matched’. Individuals can take up to 25% of the SIPP as a tax-free lump-sum.

In terms of the balance remaining in the SIPP, individuals can choose to leave their SIPP invested and take lump-sum payments or draw-down an income (by withdrawing some of the returns made on investments, or by selling a proportion of their investments).

Another option is to use some, or all, of the remaining funds to buy an annuity, which pays a regular income for the rest of an individual’s life.

What happens to SIPPs when you die?

The remaining funds in the SIPP are passed to the specified beneficiaries, which could be children, family members or a charity. The tax implications are discussed in more detail below.

Is inheritance tax paid on SIPPs?

On an individual’s death, the SIPP can typically be passed to their beneficiaries (usually a spouse or children) without paying inheritance tax.

If the individual dies before 75, withdrawals by the beneficiaries will usually be tax-free. However, if they are 75 or older, any withdrawals will be taxed as their income.

How do I choose the right SIPP?

Although there is a wide choice of SIPP providers, it’s worth taking the time to review the fees charged, along with the range of investments.

As discussed above, individuals looking for help with managing their SIPP portfolio might want to consider a robo-advisor, or one of the ready-made portfolios offered by the mainstream platforms.

Who are the cheapest SIPP providers?

We’ve compared the fees charged in our pick of the best SIPP providers table above, including typical fees charged for SIPPs of different values.

One of the main costs is likely to be the platform fee. Individuals with lower-value SIPPs may find percentage-based fees a cheaper option, whereas a flat fee may be better value for higher-value portfolios.

Individuals should also consider whether they’re likely to invest in shares or funds and how often they want to trade. Although trading fees may not be charged for funds, they will incur an annual management fee.

How can individuals withdraw their SIPP?

Individuals are able to withdraw their SIPP from the age of 55 (rising to 57 in 2028). However, there is no obligation to withdraw any money at this point.

Individuals can access their SIPP before this age under certain, limited circumstances. This includes a terminal medical condition or if ill-health forces early retirement.


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