Best Sipps 2024

What is a Sipp?

A self-invested personal pension (Sipp) is essentially a do-it-yourself pension. Unlike other types of private pensions, where you usually rely on the scheme provider to decide where your retirement savings should be invested, a Sipp puts you in the driver's seat.  

You'll be taking on responsibility for choosing and managing your own investments, so you'll need to have the time and confidence to do this.

Like other types of defined contribution pension, the income you'll receive when you retire depends on how much you contribute, how well the underlying investments perform and how you decide to access your money.

Do Sipps benefit from tax relief?

Sipps enjoy the same tax benefits as other types of pension: not only are your investments exempt from capital gains tax and income tax, but you also get tax relief on your contributions (worth up to 100% of your annual earnings). This means that for every 80p basic-rate taxpayers pay in, the government pays in 20p – with more for higher rate taxpayers.

Your options for turning your pot into an income at retirement are the same, too.

When you reach the age of 55, you can take up to 25% of your pot as a tax-free lump sum (although this rises to 57 in 2028). You can then take the rest of it in cash, too (either in one go or in chunks), use some or all of your pot to buy an annuity or keep some money invested and take an income as you wish (known as pension drawdown).

What can Sipps invest in?

A Sipp gives you access to a wider range of investment options than other types of pension. These include stocks and shares, investment trusts and corporate bonds - as well as commercial property. 

The exact range of assets available will depend on the provider you choose. 'Full' Sipps typically offer the biggest choice, but tend to be more expensive as they come with a greater level of investment support. 

There are now plenty of low-cost Sipps to choose from, but if you'd like to simplify the process of selecting investments, some platforms offer a limited range of ready-made portfolios.

How much do Sipps cost?

Sipps can work out cheaper than other types of pension, but the best value provider for you often depends on the value of your pension.

Unfortunately comparing Sipp charges isn't straightforward, as companies take different approaches: you might pay a fixed admin fee or a platform fee calculated as percentage of the amount you've invested, or sometimes a combination of both.

Our table shows how much it will cost over a year to manage your Sipp with 12 leading providers.

Figures correct as of June 2023. They reflect core Sipp charges (platform and administration fees) only - not fund fees. We've assumed that money is invested entirely in funds and no trades are made. Interactive Investor calculations are based on its Pension Builder plan. The Aviva figures are for its Platform Sipp (OIS).

Interactive Investor's low monthly fee of £12.99 regardless of Sipp size makes it significantly cheaper than competitors in most cases.  It also now has a £5.99 per month Pension Essentials plan for people with pensions worth less than £50,000. 

The exception in our table is the £100,000 pot, where fellow WRP Vanguard's low percentage charge of 0.15% works out £6 cheaper over a year.

Halifax Share Dealing's low fixed fee (£45 a quarter on pots above £50,000) also makes it very competitive across different pot sizes.

At the other end of the scale, Hargreaves Lansdown is the most expensive DIY platform in our table. It charges 0.45% on the first £250,000 and 0.25% up to £1m, meaning a £500,000 Sipp will cost you £1,750 over a year

Which are the best Sipp providers?

Each year, we ask thousands of Sipp customers to rate their providers in a range of categories, including customer service, investment choice and value for money.

The firms that combine high customer satisfaction (a score of 70% and above) with competitive charges have been awarded our coveted Which? Recommended Provider status.

Members can log in to see the results of our expert analysis. If you're not already a member, join Which? and get full access to these results and all our reviews.

Source: Online survey of 1,857 UK adults in February 2023. Customer score is based on satisfaction with the brand and likelihood to recommend.

Sample sizes as follows: AJ Bell 172, Barclays Smart Investor 97, Fidelity 126, Halifax Share Dealing 48, Hargreaves Lansdown 800, Interactive Investor 155, Standard Life 97, Vanguard 126, Aegon 69, Bestinvest 44

Should I transfer existing pensions into a Sipp?

It's up to you whether you hold a Sipp alongside your other pensions or you transfer existing pots into a Sipp so you can keep track of all your retirement savings in one place.

If you're currently paying into a workplace defined contribution scheme, check if your employer will agree to make contributions into your Sipp instead before going ahead with a transfer. Some employers will only pay contributions into the workplace scheme.

If you have a final salary workplace pension - also known as a defined benefit (DB) pension - you'll benefit from a guaranteed income in retirement. For this reason, it's unlikely that transferring to a Sipp will be the right decision.

Is a Sipp right for me?

Sipps are best suited to savers who have the time and knowledge to pick and monitor their own investments.

If you like the idea of taking more control of your pensions but feel uncertain about investing, then it's best to get independent financial advice.

If the costs of advice are a barrier for you, take a look at the ready-made portfolios offered by some Sipp providers, which simplify the investment decisions you'll have to make.