A Self-Invested Personal Pension (SIPP) gives you more control over how your retirement savings are invested. Unlike traditional personal pensions, a SIPP offers wider investment choice, greater flexibility, and the option to manage your portfolio yourself — or with help from a financial adviser.
Whether you’re self-employed, a business owner, or simply want more freedom over how your pension is run, a SIPP can be a powerful long-term tool for building your retirement wealth. At NextGen Accountants, we help clients understand, set up, and manage SIPPs with confidence and clarity.
What Is a SIPP?
A SIPP is a self-managed personal pension that allows you to choose:
- how much you pay in
- when you contribute
- how your pension money is invested
Most people open a SIPP from age 18, but parents and guardians can also open one for children. You can continue paying into a SIPP until age 75, unless it’s an existing pension being transferred in.
Can I Have a SIPP and a Workplace Pension?
Yes — you can have multiple pensions, including a workplace pension and a SIPP. In fact, most employees should prioritise their workplace pension first, because:
- your employer contributes too
- charges are often lower
- many schemes offer contribution matching
A SIPP works well as an additional pension, giving you more investment control.
How Many SIPPs Can I Have?
There’s no limit. You can open as many SIPPs as you like — but remember that:
- each SIPP has its own fees
- managing multiple investment portfolios takes time and skill
If you prefer simplicity, one well-selected SIPP is usually sufficient.
How Does a SIPP Work?
SIPPs are defined contribution pensions. Your final pension value depends on:
- how much you pay in
- how your investments perform
- the charges applied
- when and how you take your pension
Tax Relief on Contributions
One of the biggest advantages of SIPPs is tax relief.
- Basic rate taxpayers get 20% added automatically
- Higher-rate (40%) and additional-rate (45%) taxpayers can claim extra through self-assessment
This means:
| Your Contribution | Actual Cost to You |
| £100 (basic rate) | £80 |
| £100 (higher rate) | £60 |
You receive tax relief on contributions up to your annual allowance, usually £60,000 per tax year (or up to your annual earnings).
When Can You Access Your SIPP?
You can normally access your pension at 55 (57 from April 2028). When the time comes, you can:
- take up to 25% tax-free
- keep the rest invested
- withdraw lump sums
- set up a flexible drawdown income
- buy an annuity for guaranteed payments
Free guidance is available from Pension Wise for anyone aged 50 or over.
How Is a SIPP Different from Other Personal Pensions?
SIPPs typically offer more investment choice. This may include:
- investment funds
- individual company shares
- government or corporate bonds
- commercial property
- land and specialist investments
Other personal pensions usually provide a smaller number of managed funds and fewer advanced options.
If you don’t want to manage investments yourself, a standard personal or stakeholder pension may be simpler — but less flexible.
Choosing Your Own SIPP Investments
Most SIPP providers offer a platform where you can choose and manage your investments. Options may include:
- professionally managed funds
- individual shares
- index trackers
- global portfolios
- property-based investments
Before choosing your own investments, understand:
- the level of risk you’re comfortable with
- the charges for buying/selling investments
- how diversified your portfolio needs to be
Since investments can rise and fall, there’s always a risk of getting back less than you put in.
Should You Get Financial Advice?
If you’re unsure, a regulated adviser can:
- assess your risk level
- recommend suitable investments
- manage your portfolio
This may involve fees, but suitable advice can protect your long-term savings.
How Much Should You Pay Into a SIPP?
Your provider may set a minimum monthly payment, but what you need to save depends on the retirement lifestyle you want. Tools like retirement calculators can help you estimate:
- how much income you’ll need
- how your money may grow
- how adjusting contributions changes results
Many people combine a SIPP with other savings like ISAs to balance long-term growth with short-term access to funds.
Setting Up a SIPP: Step-by-Step
When choosing a provider, compare:
- charges
- investment options
- online tools
- customer service
- flexibility
Low-cost SIPPs offer fewer investment choices but lower fees.
Full SIPPs offer specialist investments but at a higher cost.
Transferring Existing Pensions
Before transferring an old pension into a SIPP, check if it has:
- guaranteed annuity rates
- protected benefits
- exit fees
Some older pensions are valuable — always review before switching.
What Happens to Your SIPP When You Die?
Your provider will ask you to complete an expression of wish form to name your beneficiaries. Your SIPP can usually be passed on tax efficiently, depending on your age at death and how the pension is paid out.
How NextGen Accountants Can Help
Managing a SIPP offers huge potential — but also requires careful planning. At NextGen Accountants, we provide:
- tax-efficient pension planning
- guidance on SIPP contributions
- support with Self Assessment tax relief claims
- pension consolidation advice
- investment strategy support in partnership with regulated advisers
We help ensure your pension strategy aligns with your income, tax position, and long-term goals.
📞 Contact NextGen Accountants
📱 +44 208 123 7363 | +44 786 269 6795
📧 info@ngaccountants.co.uk
📍 Office 5046, 321–323 High Road, Chadwell Heath, Essex, England, RM6 6AX
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Disclaimer: This blog is for general information only and does not constitute professional advice. NextGen Accountants accept no liability for any loss arising from reliance on its content — please seek tailored advice before making decisions
