SIPP

SIPP stands for Self-Invested Personal Pension, a UK retirement savings wrapper that offers greater control over investment choices within a pension plan than standard personal pensions. It is a registered pension scheme, eligible for tax relief on contributions and regulated by The Pensions Regulator and HM Revenue & Customs.

Key features include a broad range of permitted investments, subject to the rules of the SIPP provider. Investors can typically hold shares, funds, bonds, exchange-traded products, and, in many cases, commercial property through a property SIPP. Not all asset types are allowed, and there may be restrictions on overseas assets or certain high-risk instruments. SIPPs are usually administered by specialist providers, and fees and complexity are higher than for standard pensions, reflecting the added investment choice and administration.

Contributions generally qualify for tax relief within annual allowances, and investment growth inside the SIPP is free from UK capital gains and income tax. At retirement, a portion of the fund can be taken as a tax-free lump sum (commonly up to 25%), with the remainder used to provide income through drawdown or annuities, subject to applicable rules and rates. Access typically begins from age 55, with rules potentially changing.

Administration and suitability: SIPPs are regulated pension schemes designed for savers who want control and a wider investment palette, but they require careful planning around contribution limits, pension freedoms, liquidity, diversification, and fees. They are most appropriate for investors comfortable with investment risk and ongoing administration.