What’s a SIPP (Self-Invested Personal Pension)?

It can sit alongside your existing workplace pension or, if you don’t have one, provide a flexible way to save for your retirement. While employers must give employees access to a workplace pension under automatic enrolment laws, it’s worth noting that not all SIPPs are suitable for this. And it’s a good idea to make the most of your workplace pension to get the full benefit of your employer’s contributions before taking out a separate SIPP.

If you already have several pensions, opening a SIPP could be a way to bring them all together in one place and save on admin.

Remember that the value of your pension can go down as well as up and you may get back less than you paid in.

Find out more about different kinds of pensions.

A SIPP is a personal pension that allows you to pick and choose from a range of investments. The upside of this is you get to decide where and how much of your retirement savings  are invested, you'll need to be comfortable managing your own investments though. Find out more about investment options at Aviva. 

A SIPP offers you control and flexibility. You have the final word over how much of your money goes into your pot in the first place and, because there’s usually a wider range of investment options, how and where it’s invested.

This means when the markets are riding high, you could get more return on your investments. Being able to choose higher-risk investments could bring bigger returns but, of course, also bring greater risk of loss.

As with other pensions, your SIPP fund is free from both Capital Gains Tax and Income Tax while it is invested.

With a SIPP, the government will top up contributions which are not from your employer by 20%, so for every £80 you pay in they'll bump it up to £100.  If you pay tax at a higher rate, you can then reclaim more tax through your self-assessment tax return.  You have an annual allowance covering all pension contriubitons for your benefit.  This is £60,000 unless you have an income of more than £200,000 a year, or have already taken taxable pension benefits other than an annuity.  Tax relief from a personal pension is limited, you can only get it on 100% of your earnings, or up to £3,600 - if you earn less than that.

From age 55 (57 from 2028) you can tax up to 25% of your pension pot tax-free. This is limited by the lump sum allowance, for the tax year 2025/2026 the maximum you can take tax-free from your pension is £268,275.

These limits may be higher under certain circumstances - you can find more information at gov.uk. 

Lastly, when you die, the money from your SIPP isn’t normally included in your estate. This means you can pass on the money in your pension to the people you leave behind free of inheritance tax.

More about pension tax relief.

Pretty much anyone in the UK under the age of 75 can take out a SIPP. You can even open them for your children to give them a head start. And some providers have SIPP options for non-UK residents too.

You may be able to carry over any unused annual allowance from the last three tax years but you’ll need to be prepared to leave your money untouched until you’re at least 55 (57 from 6 April 2028 unless you have a protected pension age).

Please note that tax rules are dependent on individual circumstances and are subject to change.

Usually, yes you can. It depends on the type of pension or its features, though. Combining pensions can make managing them – and keeping an eye on how your retirement’s looking overall – much easier. But it’s worth taking some time to think about whether it’s the best option for you as transferring isn't right for everyone. You'll need to check whether you'll lose any valuable pension benefits, whether you'll pay any exit fees and have the same investment choices, plus there's no guarantee you'll be better off by switching.

You’ll also need to check whether your new provider can accept your particular pension. Here you can find out more about transferring pensions.

Also, you’ll need to be comfortable managing your own investments and making your own investment decisions. As always, if you’re not sure, it's a good idea to talk to a financial advisor. You can find one at Unbiased - there will be a charge for advice, but there are often a number of ways to pay.