What is a Self-Invested Personal Pension (SIPP)?

A Self-Invested Personal Pension (or SIPP) is a flexible form of individual pension. As the name suggests, this type of pension lets you as the holder choose what investments to put into your pension, which is usually held on a platform that allows you to pick shares and funds. A SIPP is a type of private pensions.

You can buy and sell the funds within your SIPP or hold your pension in cash, benefitting from the same tax breaks as you would in an employer pension or other individual pension. Charges can be higher than other pensions due to the wider investment range that can be included within the wrapper due to the flexible nature of these products however you are managing the pension yourself which comes with greater risk.

If you have a SIPP, or another type of individual pension where you select the investments, you will likely use an investment platform. This is usually a website, where you can buy and sell investments within a pension. Some platform providers will make investment recommendations for you. Platform providers will charge you, either via an annual fee or per transaction, for managing your investments. Platform fees can vary significantly from provider to provider.

Related terms
What is a Defined Contribution Pension (aka money purchase)
What is a Defined Benefit Pension