Frequently Asked Questions About SIPPs (Self-Invested Personal Pensions)

A Self-Invested Personal Pension (SIPP) is a type of pension that allows individuals to choose and manage their own investments, rather than relying on a provider’s default funds.

Anyone can open a SIPP, including employed, self-employed, and non-working individuals. Even children can have a Junior SIPP, managed by a parent or guardian.

You can contribute up to £60,000 per tax year or 100% of your earnings, whichever is lower. Non-earners can contribute up to £3,600 per year, including tax relief.

✔ Tax relief on contributions – The government adds 20% tax relief to personal contributions.
✔ Higher-rate taxpayers can claim additional tax relief through their tax return.
✔ Tax-free growth – Investments grow without capital gains or income tax.

✔ Stocks & Shares
✔ Bonds & Fixed Income
✔ Exchange-Traded Funds (ETFs)
✔ Commercial Property
✔ Investment Trusts & Mutual Funds

No, SIPPs are locked until age 55 (rising to 57 in 2028). Early withdrawals may incur tax penalties.

✔ You can take 25% tax-free cash from your pension pot.
✔ The remaining funds can be used for drawdown, annuities, or lump-sum withdrawals.

✔ Flexi-access drawdown allows you to withdraw money gradually while keeping the rest invested.
✔ You can adjust withdrawals based on your financial needs

Yes, you can transfer workplace pensions, personal pensions, and other SIPPs into a single SIPP for easier management.

✔ Platform fees – Charged by the provider for managing your account.
✔ Fund management fees – Costs associated with investment funds.
✔ Trading fees – Charges for buying and selling investments.

Yes, SIPPs allow investment in commercial property, but residential property is not permitted.

✔ New Inheritance Tax Rules (Effective April 2027) – Previously, SIPPs were excluded from inheritance tax (IHT), but under new legislation, unused pension funds will now be included in the deceased’s estate for IHT purposes.
✔ Taxable Estate Inclusion – If the total estate value (including the SIPP) exceeds the £325,000 nil-rate band, it may be subject to 40% inheritance tax.
✔ Impact on Death Before 75 – Previously, SIPP funds passed tax-free if the pension holder died before age 75. Under the new rules, even in these cases, SIPP assets will face IHT.
✔ Death After 75 – Beneficiaries will pay both inheritance tax and income tax at their marginal rate when withdrawing funds.

These changes significantly impact estate planning, so it’s worth reviewing your pension strategy to minimize tax liabilities.

Yes, you can have multiple SIPPs, but managing them separately may increase costs.

✔ Compare fees, investment options, customer service, and platform usability.
✔ Popular providers include AJ Bell, Hargreaves Lansdown, and Fidelity.

Yes, employers can contribute to a SIPP, but workplace pensions often offer better benefits

✔ SIPPs offer full investment control, while workplace pensions have limited fund choices.
✔ Workplace pensions include employer contributions, making them more cost-effective

Yes, consolidating pensions into a SIPP can simplify management and reduce fees.

✔ £60,000 per tax year, but tapered for high earners earning over £260,000.

Yes, SIPPs allow investment in global markets, including US, European, and Asian stocks.

✔ Ideal for experienced investors who want control over their pension investments.
✔ If you prefer hands-off investing, a workplace pension or managed fund may be better.