IMPORTANT ANNOUNCEMENT: MyWalletHero is becoming The Motley Fool UK - click here to read more about our name change.
Retirement saving and pension planning

What is a SIPP?

By:  Alice Guy (FCA) | 27th September 2021

Are you comfortable making your own investment decisions? Do you want to have a DIY pension? If so, then a self-invested personal pension or SIPP might be for you. Here I investigate three questions: What is a SIPP? What makes it different from other pension schemes? And what are the pros and cons of this type of pension?

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 is 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.

SIPP: what’s it all about?

As the name suggests, a SIPP is a DIY pension. It is aimed at investors who are confident managing their own pensions rather than taking financial advice. It’s a great option if you want a wide range of funds to choose from as this type of pension often has more choice than a traditional personal pension. It also usually has lower fees and charges than other schemes.

A SIPP is particularly useful as a second pension if you are already paying the maximum amount allowed into your company scheme. It’s also a popular option with investors who don’t qualify for an employer’s pension or are self-employed. 

What are the benefits of a SIPP?

What are the drawbacks of a SIPP?

And finally

If you’re not sure whether a SIPP is right for you, then it may be best to take financial advice before going ahead. Although a SIPP doesn’t come with financial advice, there’s nothing to stop you from seeking independent advice before you take the plunge.

Still have questions?

If you didn’t find everything you were looking for on this page, we have other ways to help:


Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.

Was this article helpful?
YesNo