A Self‑invested Personal Pension (SIPP) is basically a do‑it‑yourself pension for UK investors. You get tax relief on what you pay in, your investments grow free of capital gains tax, and you choose exactly where to invest.
Unlike a normal trading account, the government tops up your contributions, and unlike an ISA, the main goal is retirement.
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 new tax season is a good time to think about a SIPP, and this month could be particularly good. Here’s why…
A correction as an opportunity
Right now, the UK market has just come through a rough period. The FTSE 100 dropped from around 10,900 points down to 9,600 in a matter of weeks, briefly entering a correction.
Naturally, this can be scary. However, for long‑term SIPP investors, it can also be an opportunity to grab some quality companies at lower prices.
If you drip feed contributions each month, lower prices give that extra boost, netting more shares for the same cash. Over 20 or 30 years, that can make a huge difference.
Growth vs income in a SIPP
In a SIPP, it usually makes sense to blend growth and income shares. Growth stocks aim to increase in value faster than the market. Income stocks pay regular dividends that you can reinvest while you are working, or later withdraw to help fund your retirement.
Reinvested dividends are powerful: more shares = more dividends. That’s compounding at its finest.
This is why I’m a big dividend fan. But with retirement in mind, it pays to be extra critical. I want businesses that are likely to still be here in 20 or 30 years’ time.
For example, Unilever, GSK and National Grid all fit that criteria. So does one of my favourite options to consider for a SIPP: F&C Investment Trust (LSE: FCIT).
The long‑term bet
F&C Investment Trust has been around since 1868, making it the oldest collective investment scheme in the world, with a history stretching close to 158 years. The fund holds more than 400 companies worldwide, plus a slice in private equity.
Since 2006, it’s returned around 554% in total – a 20% annualised return. Meanwhile, it increased its dividend for more than 50 consecutive years, including a 6.1% rise in 2024 to 15.6p per share. Today, it trades on a discount to net asset value (NAV) of around 9%, decently below the value of its underlying holdings.
Still, as an equity fund, it’s at risk if global markets fall sharply. Plus, it uses some gearing (borrowing to invest), which can magnify losses in a downturn.
Macro‑wise, it benefits from broad global exposure, which helps smooth out volatility. With a long track record through wars, crashes, inflation spikes and rate cycles, it fits my SIPP stock criteria.
Final thoughts
Using a market dip to tuck quality assets into a SIPP can be a smart move. It combines tax relief with lower entry prices for decades of compounding – a powerful mix for anyone planning their future retirement.
For passive, hands‑off SIPP investors, there’s a lot to be said for funds and trusts with proven staying power. And few have a history as long and steady as F&C Investment Trust.
But for those willing to be more active, today’s correction has also thrown up plenty of individual FTSE 100 shares trading at what look like bargain prices.
