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A self-invested personal pension (SIPP) is a type of private pension scheme designed to give individuals more control over their retirement savings and investment choices.
If you are looking into starting a SIPP but are overwhelmed by the number of options available on the market, we can help you narrow down your selection with our list of best SIPP providers for six different types of investors. Additionally, we will discuss the workings of SIPPs, their benefits and drawbacks, and other important information all SIPP investors need to be aware of.
Best SIPP Providers – Our Recommendation
| Name | Score | Visit | Disclaimer | |
|---|---|---|---|---|
 | 7.6 | Visitii.co.uk | ||
 | 8.9 | Visitig.com | Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. | |
 | 8.3 | Visithl.co.uk | ||
 | 9.1 | Visitinteractivebrokers.com | ||
 | 7.9 | Visitajbell.co.uk | ||
 | 7.6 | Visitfreetrade.io | The value of your investments can go down as well as up and you may get back less than you invest. | |
 | 6.5 | Visitfidelity.co.uk |
Best SIPP Providers Compared & Reviewed
Below, you can find more details and brief summaries illustrating why we believe these six providers are the best at what they do.
Best all-around – IG
Best for more extensive portfolios – Interactive Investor
Best variety of investments – Hargreaves Lansdown
Best for smaller portfolios – AJ Bell
Best for trading stocks and ETFs – Freetrade
Best for investors new to SIPPs – Fidelity
While all the providers on our list are excellent choices, each one targets a specific type of investor, while IG has an option for everyone. Despite its minor flaws, IG’s platform fee is cost-effective for pension pots of all sizes and investors with various trading styles.
Additionally, it grants access to a massive range of domestic and international shares, funds and investment trusts for investors who want to be in control, and ready-made portfolios, for investors who like to take a passive approach.
- A huge range of investment options
- Offers DIY and ready-made portfolios
- Fixed and capped annual costs
- Great education tools and research offerings
- Demanding minimum investment requirements
- No interest on cash balances
- Complicated fee structure
- Provides access to high-risk investment options
One thing that stands out the most about Interactive Investor is its unique platform fee. Instead of charging a percentage of the pension pot like most of its competition, the provider charges a fixed monthly rate, making it a popular choice among high-net-worth investors.
Coupled with the vast array of investment options, it’s the ideal choice for building a large portfolio, but inadequate for new investors who are still learning the trade. Given the pricing model, flexibility, and market reach, we also found ii to be the best pension option for limited company directors.
- Platform fee cost fixed at £12.99
- Free regular investing
- Offers a massive range of DIY and ready-made investment options
- Provides plenty of insightful research
- Not at all cost-efficient for smaller pension pots
- Charges a fee for buying and selling funds
- Currency exchange costs are a bit on the pricey side
- A bit complex for novice investors
Hargreaves Lansdown is a reputable provider offering everything experienced investors need to make the most of their capital. Access to a vast number of UK and international shares, funds, ETFs, investment trusts, bonds, and other options, as well as helpful tools and resources.
On the other hand, as a premium service, it isn’t the cheapest option by any means and not the best choice for novice investors who won’t do a lot of share trading. With the time and effort it saves, we found that Hargreaves Lansdown is also the top pension provider for the self-employed.
- Offers the broadest range of investment options
- No fees for buying and selling funds
- Light minimum investment requirements
- Provides plenty of helpful data and research resources
- Not the ideal fee structure for large portfolios
- High annual platform fee for pots under £250,000
- Buying and selling shares can be costly
- Not designed with beginner investors in mind
AJ Bell is among the most popular traditional brokers with an excellent performance track record and reputation among users. It offers a vast array of investment options, including stocks, bonds, ETFs, and funds, as well as a number of SIPP accounts — its junior SIPPoffering specifically is among the best options available today.
The low percentage platform fees make it perfect for savers with smaller pots, but investors with deeper pockets can probably find a more cost-effective option with fixed rates.
- One of the most affordable options for small to medium portfolios
- Not too many extra fees
- Gives you the ability to start a Junior SIPP
- Allows trading of a good range of shares, bonds, and funds
- The lack of a fixed fee makes it costly for larger portfolios
- Charges a fee for buying and selling funds
- Limited research resources compared to other options
- Can be a bit overwhelming for beginners
The lack of a dealing fee when buying and selling stocks and shares is Freetrade’s highlight and the platform's main selling point. Just like Interactive Investor, its annual platform fee is fixed, though at a slightly lower cost, which is fair as Freetrade’s range of investment options is considerably narrower.
Investors with at least £10,000 in their pension pots who do a lot of trading can make the most of Freetrade’s fixed rate, free trading, and competitive foreign exchange rates.
- Very competitive pricing model
- No minimum investment requirements
- Fees kept to a minimum
- No extra charges for buying and selling shares and stocks
- Provides almost no research resources
- Doesn’t offer a drawdown
- The fixed fee is not ideal for smaller portfolios
- Mobile-only platform
Fidelity is our recommended choice for savers who are just getting started with SIPPs. While its range of investment options is not the widest, it does provide ready-made portfolios and plenty of educational and research resources, making it ideal for inexperienced investors.
In terms of pricing, it isn’t the most affordable or the most expensive choice, but it includes free fund trading, which is a big plus.
- Beginner-friendly and easy to use
- A diverse array of investment options, including ready-made portfolios
- Access to valuable research and insights
- No fee for trading funds
- Not the most competitive fees out there
- Other providers provide a more comprehensive range of investment options
- Share dealing fees for online deals could be lower
- Experienced investors might find it limiting
How Do We Rate & Review Providers
There are some essential factors that all investors consider when looking for a new SIPP provider. However, a few often overlooked details can make a lot of difference, which we didn’t leave out.
When we created the reviews, our primary focus was on the following factors:
Regulation – We only reviewed providers authorised and regulated by the FCA that ensure that they operate fairly and transparently, and are protected via the Financial Services Compensation Scheme.
Performance Track Record – Besides legality and legitimacy, we looked for providers with a proven record of positive investment performance and a reputation from past clients for providing financial stability and excellent customer experience.
Range of Investment Options – Considering we reviewed SIPPs, the range of options for DIY portfolios took priority, but we also appreciated the efforts when providers made good offerings in terms of ready-made portfolios.
Cost-Effectiveness – Although lower prices are certainly more attractive, we made sure to look at more expensive options as well and rate them highly when they prove their worth and give additional value for the extra cost.
Fee Structure and Transparency – Fees are unavoidable when buying and selling shares, though some providers keep commissions to a minimum which is a great plus. Furthermore, we appreciate providers that clearly disclose their charges.
Moreover, we considered other qualities, such as flexibility regarding contributions and withdrawals, risk management policies and procedures, access to advice, and all the necessary ins and outs that make a SIPP provider stand out from the crowd.
SIPPs Explained
Self-invested personal pensions, or SIPPs, are private pension plans that give investors greater control over their own investments. While other private pension types are managed by professionals employed by the financial institution that offers the pensions, SIPPs allow savers to decide how and where they want their savings invested.
Depending on what the investor wants, SIPP providers usually offer access to a large number of investment options, as well as ready-made portfolios. They are left at the discretion of the saver to make combinations and invest their assets in stocks, funds, bonds, ETFs, and other investment instruments, as they see fit.
Moreover, SIPPs are portable and flexible, which means they allow savers to make adjustments to their portfolios under different market conditions. With SIPPs, investors can increase or decrease their contributions or move their savings to a different pension provider if necessary.
As SIPPs require dedication and active management, they are primarily utilised by experienced investors who know enough about investing to make successful investments. Moreover, SIPPs allow such individuals to consolidate pensions, make contributions and earn tax-free interest.
SIPPs are not recommended for savers who don’t know much about investing or are too busy to manage their pension funds, as with the wrong investments, they risk losses and potentially not saving up enough for a stable income in retirement.
Pros and Cons of SIPPs
Like all other financial services, SIPPs have advantages and drawbacks. Although we already touched upon some of them, here’s a complete breakdown of the pros and cons of SIPPs.
- Control – SIPPs provide the most control to investors who want to have a hands-on approach and manage their investments.
- Flexibility – SIPPs also provide savers with a certain degree of flexibility over their contributions and withdrawals.
- Consolidation – Savers can use SIPPs to effectively consolidate multiple pensions into one, making managing retirement savings much more convenient.
- Portability – With SIPPs, it’s easier for investors to switch things up and move their pension pots to providers that give them better terms.
- Tax benefits – Although they are practically investment accounts, the contributions made to SIPPs are exempt from capital gains tax, subject to an allowance limit.
- Inheritance planning – SIPPs give savers the opportunity to pass on their pension savings to their close ones tax-free and without legal proceedings.
- Higher return opportunity – While other private pension plans focus on financial stability, successful SIPP investments can result in higher returns.
- Complexity – Successfully investing and managing a SIPP is much more complicated than other private pension plans and may require professional assistance.
- Cost – Their annual platform charges and a few other unavoidable charges associated with managing a SIPP make it a costlier option than other pensions.
- Risk – Since SIPPs allow savers to call the shots, they are automatically a riskier option, as their retirement income will depend on the performance of their investments.
If you are thinking about starting a SIPP account for yourself, consider the potential drawbacks and how they would affect your retirement fund.
How Can You Invest in A SIPP?
Investing in a SIPP can be done in several different ways. SIPP accounts can be opened with a range of providers, including banks, investment companies, and specialist pension providers. Most commonly, investors open a SIPP account through a platform or investment provider, providing access to various investment options.
These options can include buying and selling stocks, bonds, and funds, as well as alternative assets such as property. Once their SIPP is created, investors can make regular contributions, either through direct debit or by transferring in existing pension pots.
In addition, investors can choose to invest in a SIPP through a financial adviser, who can help tailor a portfolio to meet individual investment goals.
Products you can invest in via SIPPs
One of the key benefits of a SIPP is the wide range of investment products you can choose from. Granted, the range of investment options varies from one provider to another, but most SIPP providers give access to many stocks, mutual funds, index funds, bonds, and exchange-traded funds.
Here’s a breakdown of the investment products you can expect to find with SIPPs.
Risk Exposure | Average Returns | Key Features | |
|---|---|---|---|
Stocks | High | 8-10% | Dividend income, capital gains |
Mutual funds | Medium to high | 4-10% | Diversification, professional management |
Index funds | Low to medium | 4-10% | Low fees, diversification |
Bonds | Low to medium | 1-5% | Fixed income, lower risk than stocks |
ETFs | Medium to high | 4-10% | Low fees, diversification |
Property | High | 4-10% | Income from rent, potential for capital appreciation |
Cash and cash equivalents | Low | 1-2% | Preservation of capital, low risk |
Please note that the risk exposure and average returns for these investment products can vary significantly depending on factors such as market conditions, the specific asset class, and the investment strategy used. This is why it’s imperative to conduct your research and consult with a financial advisor before making any investment decisions.
SIPP Charges
Different SIPP providers use different fee structures and different terminology to disclose their fees, though ultimately, there are some fees that are associated with most SIPPs, including:
Annual platform fee (administration fee, management fee) is a yearly fee charged by the SIPP provider for managing your account and the investments held within it.
Annual shares custody fee is a fee charged by the provider for holding shares on your behalf. It covers the cost of registering and recording share ownership in your name.
Annual funds custody fee is just like the yearly shares custody fee, but this one relates to the funds in your name. Again, some providers don’t charge it.
Shares dealing charge (buying and selling shares or funds fee) covers the cost related to the execution of your trades.
Foreign exchange charge only applies if you invest in assets denominated in a foreign currency and covers the cost of converting your currency into the currency of the investment.
Moreover, there are some fees that more and more providers decide to waive to attract more customers, including set-up fees, transfer fees, exit fees, and inactivity fees.
Please note that every provider uses a different fee structure, and some like to charge a fixed rate, while others charge a percentage of the SIPPs value. Additionally, some have tiered charges and apply different percentages to different portions of your pension pot, while others have percentages that apply to the total amount.
When opening a SIPP, be sure you read the terms and conditions carefully and avoid getting surprised by a fee you did not expect.
Yearly Allowances, Tax Rules, and Withdrawals
Before you decide to open a SIPP, you need to be aware of a few essential details and limitations.
Namely, you should understand how the tax benefit associated with SIPPs works. When you contribute to your SIPP, the government tops your contribution with another 20% of its value, covering its tax costs. This means you can deposit to your SIPP and earn interest on your investments tax-free.
However, the government also sets a limit on how much tax relief every investor gets. This limit called the annual pension allowance, changes every tax year. For the year 2023/24, the annual pension allowance is £60,000 or 100% of your annual income if it’s lower than £60,000. Investors with large annual incomes over £260,000 are subject to other rules.
Additionally, while the tax benefits apply to your contribution and capital gains, they only apply to up to 25% of the SIPPs value when withdrawn. The remaining 75% are subject to the marginal rate of income tax.
Moreover, the funds in SIPPs can only be accessed at a specific age, typically at 55 or later, and early withdrawals can result in tax implications and severe financial penalties.
How to Find the Best SIPP for Your Needs
When looking for the best SIPP for your needs, it's crucial to consider various factors. Don’t just consider the fees associated with different providers and compare them, but also look at the investment options available to you, as well as the ease of use of the platform and the level of customer service provided.
It's also crucial to remember your investment goals, risk tolerance, and retirement plans when choosing a SIPP. By taking the time to compare and evaluate different options, you can find the SIPP that's right for you. Feel free to seek professional advice if you need clarification on which one to choose.
FAQ
How much can you pay into a SIPP each year?
What is SIPP basic rate tax relief?
Withdrawing from your SIPP: what are your options?
Additional Resources
- What is (hopefully) one of the cheeriest of occasions, retiring abroad, can and often is soiled by an endless amount of paperwork and one big question: whatever will happen to my pension? It seems daunting, but once you understand the process, you'll see it's not rocket science. Here, we explain how it works.
- Choosing between a Lifetime ISA or pension could be your golden ticket for retiring in style, so let’s learn about the ins and outs of these long-term saving instruments.
- It's generally possible to transfer your pension to another provider and this could be a great way to save more money and get the most out of your pot. In this guide, we'll look at how you can transfer your pension, your eligibility to do so, and any other factors to consider before taking the plunge.
- Regardless of your current financial situation and how young you are, building a substantial pension pot is essential. People work throughout most of their lives, and their retirement is the only time they can kick back, relax, and enjoy the benefits of their hard work.
- The key to successful retirement planning is understanding the options available and finding one that works for you. Whether you're an employee or a self-employed individual, having a pension plan is a secure way to ensure you will have a steady stream of income during your retirement years.
- Saving for your future is essential, but finding the right way to invest your money can be overwhelming. For example, should you pay into an ISA or a pension plan? Let's down the options and find out.
- Private pensions are retirement savings plans that savers set up, and contribute to, by themselves. They are one of the most popular ways of securing a comfortable life in retirement, and most financial institutions offer some kind of private pension scheme.
- When you leave an employer, any benefits that have been accrued in your pension will not be lost, as the fund actually belongs to you. This means that even though you are no longer working with that particular company, you will remain a member of their pension scheme and your money will stay invested as it was prior to leaving.
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