What is a SIPP?
SIPP stands for self-invested personal pension, a type of pension available to UK residents that gives you greater freedom when investing for your retirement.
Call 0800 195 3100 or send us an email newaccounts.uk@ig.com with any questions about opening an account between 8am and 6pm (UK time) on weekdays.
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Get info fast via our instant help and support portal. Available for account queries, ProRealTime, product info and more.
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Get info fast via our instant help and support portal. Available for account queries, ProRealTime, product info and more.
Visit help and support for more information.
Call 0800 409 6789 or email helpdesk.uk@ig.com if you have any questions about investing. We're available 24/7 between 8am Saturday and 10pm Friday.
Contact us 0800 409 6789
Call 0800 195 3100 or send us an email newaccounts.uk@ig.com with any questions about opening an account between 8am and 6pm (UK time) on weekdays.
Contact us 0800 195 3100
Get info fast via our instant help and support portal. Available for account queries, ProRealTime, product info and more.
Visit help and support for more information.
Get info fast via our instant help and support portal. Available for account queries, ProRealTime, product info and more.
Visit help and support for more information.
Call 0800 409 6789 or email helpdesk.uk@ig.com if you have any questions about investing. We're available 24/7 between 8am Saturday and 10pm Friday.
Contact us 0800 409 6789
Remember: the value of investments can go up or down. You could get back less than you invest.
Types of Pensions
There are different types of pensions in the UK and over time you may accumulate a combination of them if you move jobs.
| Pension type | Allowance |
|---|---|
| State pension | The full State Pension is currently worth £185.15 per week (2022/23) totalling £9,627.80 per year. To receive the maximum State Pension amount, you’ll need to have 35 ‘qualifying’ years. |
| Workplace Pension | A workplace pension is a way of saving for your retirement that's arranged by your employer. Usually both you and your employer have to pay into it under Auto Enrolment rules. One drawback of a workplace pension is that you are typically restricted with the range of options you have to invest. |
| Self-Invested Personal Pension (SIPP) | A SIPP is a saving product that you can set up yourself to save money for your retirement. You can choose from a number of SIPP providers which means the range of investments you have access to is greater than within a Workplace pension. |
The benefits of a SIPP
Basic rate taxpayers receive 20% tax relief on contributions into a SIPP. For example, an £8,000 contribution will be topped up by the basic rate of 20% which means a total of £10,000 will be available to invest.
Higher rate taxpayer can claim an additional 20% tax top up via your tax return.
Top-rate taxpayers can claim an extra 25% via your tax return.
Your investments are sheltered from capital gains tax, income tax and dividend tax.
Who can open a SIPP?
Anyone under 75 in the UK can open a SIPP.
Remember, when you invest in a SIPP you usually won’t be able to access your money until you reach at least 55 years of age (or 57 from 6 April 2028).
SIPP rules
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Annual allowance
The maximum amount you can pay into all your pension schemes each tax year and benefit from tax relief is £40,000. This annual allowance is the total contribution amount after any tax relief has been applied.
If your employer makes contributions on your behalf, this will count towards the annual limit but doesn’t count towards your tax relief limit. Employer contributions are paid gross (before tax), and your employer will claim tax relief when they contribute.
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Reduced allowance
Your annual allowance may be less than £40,000 if:
1. you have flexibly accessed your pension savings
2. you are a high-income earner (your ‘adjusted income’ is over £240,000)
3. your annual income is less than £40,000If you are a high-income earner, for every £2 of ‘adjusted income’ above £240,000, your annual allowance is reduced by £1. The maximum reduction is £36,000 which means that if your ‘adjusted Income’ is £312,000 or more, then your annual allowance will be reduced to the minimum of £4,000.
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Carry forward
If you have used up your annual allowance in the current tax year but didn’t use all your annual allowance in any of the last three tax years, it may be possible to carry it forward.
You must have been a member of a pension scheme during the year you want to carry forward and earned income in the current tax year that is equal or greater than the amount you wish to contribute to your SIPP (including any carry forward).
Please remember, any tax treatment depends on your individual circumstances and may be subject to change in future.
What can I invest in?
Choose from a wide-range of investments – including individual stocks, funds and ready-made portfolios:
- Individual stocks
- ETFs
- REITs
- Investment trusts
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