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Compare SIPP accounts in the UK
Use our comparison tables to compare SIPP (self-invested personal pension) account brokers in the UK. Compare key features like research, added value, IPO and placing access, commission and costs.
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What is a SIPP?
SIPP stands for self-invested personal pension. Essentially, a SIPP is a pension plan where the investments are chosen by the pension holder, rather than by the provider. This gives the holder far more control over how their money is invested than is the case with a traditional pension.
How SIPP accounts work
As with any other pension, tax is not charged on any income that is invested in a SIPP. A 40% or 20% tax payer can transfer 100% of their pre-tax income into a SIPP. This potentially makes SIPPs a tax efficient approach to investment. However, you will be restricted from withdrawing money invested via a SIPP until the age of 55.
A huge range of different types of investment can be included within a SIPP. The legislation that covers SIPPs allows any asset to be included, but a small number will be subject to tax penalties. These include residential property, moveable property under the value of £6,000 and exotic assets %28for example, classic cars and art%29. SIPP brokers will generally not offer this class of assets in their accounts.
How to get started
In order to set up a SIPP, it is necessary to start an account with a stock broker. Different SIPP brokers will have different schedules of charges for their services. In general, these divide into low cost SIPP accounts and full SIPP accounts. The difference between these is that low cost accounts only include charges for executing trades, whereas full SIPPs also engage the broker in an advisory capacity.
Selecting a SIPP account
– Things to avoid
The charges involved in setting up and managing a SIPP can be quite steep. Make sure that you understand how much you will be charged to set up the account, the on-going annual charges, the charge per trade and the transfer out charge. If you select a SIPP broker with high charges for your planned investments, you could end up throwing away a significant amount of money.
– Things to look for
Low cost SIPPs can be managed entirely online. Make sure that the SIPP platform provided by the broker has a user interface that you find intuitive. Also, low cost SIPPs typically have a more restricted range of investments than full SIPPs. Make sure that the account that you choose will actually allow you to make all of the investments that you can foresee, including in your SIPP.
Examples of SIPPs
The whole point of a SIPP is to allow individuals greater freedom over how they save for retirement. As a result, there are a huge number of different approaches to setting up a SIPP.
A less experienced or more passive investor could set up a SIPP with a monthly amount being invested into a selection of unit trusts in order to spread risk. By contrast, a more active investor could set up a SIPP with individually chosen stocks and shares in sectors that they fully understand.
Different investors can set up SIPPs according to their own expertise, which includes commercial property, gold bullion or contracts for difference.
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