What is a self-invested personal pension (SIPP) and how does it work?

A SIPP is a type of personal pension where the investment decisions are entirely in your hands. You either manage your investments yourself or ask a professional, like a Financial Adviser to take care of them on your behalf.

The money you pay into your SIPP can usually go into a wide range of investments, like investment funds, stocks and shares and commercial property. The value of your investment will go up and down. It isn’t guaranteed, so you may get back less than you put in.

With a SIPP, you have control of how the money is invested, subject to the investment options offered by your pension provider. You, or your authorised financial adviser, have full control over your investment mix. That makes a SIPP a very flexible but potentially also complicated way of managing your savings.

You also have flexibility over your contributions with a SIPP. You can usually change the amount you save on a regular basis, add occasional contributions or even take a break from saving if you needed to.

As with all personal pensions the goal is to save for your retirement. When you reach your chosen retirement age, you'll then be able to use the money saved in your SIPP to fund your retirement. You can either take the money as cash, use it to buy a retirement income product or leave it where it is, until you need it.


What are the tax benefits of a SIPP?

SIPP contributions are eligible for pension tax relief. This means that the government adds money to your pension. Find out more about pension tax relief with our guide.


What if I'm not happy choosing my own investments?

If you want some control over how your pension is invested, but don't feel comfortable fully managing your investment options, then our Personal Pension might be right for you.

It gives you a choice of five funds based on different risk appetites. Depending on which fund you choose, we'll invest your money in a way that reflects your preferred risk level.

If you're not happy choosing your own investment, then you should speak to a financial adviser who can do this for you.

Find out more about our Personal Pension