We’re quickly approaching the 5 April deadline for investors to use this year’s Self-Invested Personal Pension (SIPP) £60,000 annual allowance. And while this can be rolled over into the next tax year (unlike an ISA), not using it can leave a lot of money on the table.
In fact, someone who put £60,000 to work in a SIPP at the start of the 2025/26 tax year could now be sitting on close to £250,000 today. Here’s how.
Unleashing the power of a SIPP
Not everyone in Britain has the luxury of earning enough to use up the full £60,000 annual SIPP allowance. But for the higher earners looking to build retirement wealth, the 2025/26 tax year has proven to be exceptionally lucrative.
After 20% tax relief, a £48,000 deposit is automatically topped up to £60,000 by the government. And while higher earners can claim an additional 20%, that money isn’t automatically added to the SIPP but rather awarded at the end of the tax year. So to keep things simple, let’s ignore this extra relief.
Looking back to roughly 12 months ago, the FTSE 100 took a chunky tumble following the announcement of widespread US tariffs.
However, the smart investors who used their recently refreshed allowance to capitalise on the chaos with a tracker fund have gone on to earn a staggering 39.7% total return, transforming £60,000 into £83,820.
But for some stock-pickers, the gains have been even more explosive.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
A staggering result
With geopolitical uncertainty sending demand for precious metals like gold through the roof, Fresnillo (LSE:FRES) shares have skyrocketed since 7 April, climbing a staggering 312%!
That means even before dividends, anyone who invested £60,000 in a SIPP last year is now sitting on a nest egg worth roughly £247,200 – more than double the size of the median UK pension pot.
This goes to show that by picking the right stocks and making use of the £60,000 SIPP allowance, even if it’s just a small portion of it, investors can unlock an enormous amount of wealth.
Still worth considering?
The mining giant continues to benefit from both surging silver and gold prices. And looking ahead, management appears confident that precious metal prices will remain elevated in 2026, driven by both higher demand for traditional safe haven assets, as well as higher demand from the industrial sector.
That certainly sounds encouraging. But then why did Fresnillo shares drop recently on the back of its latest record results?
The answer most likely is that all of the expected growth in 2026 is already baked into the share price. And consequently, if geopolitical and trade tensions cool, gold and silver prices might actually retreat, sending Fresnillo shares plummeting rather than surging.
The impact of lower metal prices is only amplified by the fact that the group’s production volumes are actually projected to fall this year. And while the company does have several promising projects in late-stage exploration, it could still be several years before they enter commercial production.
With that in mind, the risk-to-reward ratio surrounding Fresnillo shares doesn’t look particularly enticing to me right now. But the good news is there are plenty of other promising growth opportunities for UK investors to explore for their SIPPs in the new tax year.
