Key facts
- 960,000 UK pension savers opened a Sipp in 2024.
- This is a 30% increase in Sipp openings compared to 2022.
- Primary reasons for choosing a Sipp are greater control, boosted returns, and access to a wider range of investments.
- Sipp holders can typically take up to 25% of funds as a tax-free lump sum from age 55.
- Sipp fees vary significantly and are not capped, unlike workplace pensions which have a 0.75% cap.
Nearly one million (960,000) UK pension savers opened a self-invested personal pension (Sipp) in 2024, marking a 30% increase from 2022, according to Financial Conduct Authority data. Sipps are do-it-yourself pensions that allow individuals to manage their own investments. The primary motivations for opening a Sipp include gaining more control over retirement savings (51%), seeking to boost investment returns (39%), and accessing a wider array of investment options (35%). Savers can typically withdraw up to 25% of their Sipp as a tax-free lump sum from age 55, up to a maximum of £268,275. Unlike workplace pensions, which have a maximum charge of 0.75%, Sipp fees are uncapped and can vary significantly between providers. Analysis indicates that holding a £250,000 Sipp with the cheapest provider (Freetrade) versus the most expensive (Aegon) could result in £12,600 more after 10 years and £20,400 more after 15 years, assuming a 3% annual investment growth. Platforms like Interactive Investor, Freetrade, Halifax Share Dealing, and Scottish Widows Share Dealing offer competitive fixed fees suitable for various pot sizes. On top of provider charges, investors must consider fees for individual investments within the Sipp. For those hesitant about selecting investments, many platforms offer ready-made portfolios. The article notes that Sipps are most suitable for savers comfortable with managing their own investments or those who prefer pre-selected portfolios.