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Regular savings in a SIPP

Contributing to a pension is one of the most tax-efficient ways to save for retirement

Harness these tax benefits by setting up a regular savings plan in a SIPP

Important information - A SIPP is a type of pension for people happy to make their own investment decisions. Investments go down in value as well as up so you could get back less than you invest. The rules mentioned are those currently applying and could change in the future. You can normally only access the money from age 55 (57 from 2028). Tax reliefs depend on your circumstances. This website is not personal advice, if you are unsure an investment is right for you, please seek advice.

The tax benefits:

  • The government automatically pays 20% of your contribution through tax relief. If you are a 40% or 45% rate taxpayer, you could claim back even more through your tax return, though if you’re a Scottish taxpayer the amount of tax relief you can claim is different. Take a look at our information on the Scottish income tax changes page. How tax relief works
  • Money in a SIPP can grow free of any UK income tax and UK capital gains tax to provide retirement benefits from age 55 onwards.
  • From age 55 (57 from 2028), you can normally start making withdrawals from your SIPP, usually up to 25% tax free and the rest taxed as income. You can withdraw what you like, although remember a pension should last throughout retirement.

Tax rules can be changed by the government. The tax benefits to you will depend on your individual circumstances.

Start your SIPP Log in

What size pension pot could you build?

The table below illustrates the power of regular savings. A regular monthly contribution can add up to a sizable pension pot over the years.

Net amount you pay Gross monthly contribution What it could be worth in 20 years*
£80 £100 £36,000
£240 £300 £109,000
£400 £500 £181,000
£800 £1,000 £363,000

*Assumes 5% annual growth and 1% annual charge. The actual growth and charge could be more or less than this and will depend on the investments you choose. Inflation will reduce the spending power of money over time. Gross monthly contribution includes basic-rate tax relief.

Like clockwork: Keep your savings ticking over

Regular savings can be an effortless way to save. Saving a proportion of your monthly income could help you build a big retirement fund over time. It spreads the cost of your contributions over the year and your money is collected automatically. You can normally start, stop, increase and decrease your contributions whenever you like. Once your funds are held in a pension they are not usually accessible until age 55 (57 from 2028).

Spread your investments throughout the year

All investments can go down in value as well as up so when is the best time to invest a lump sum? With regular savings you don't have to make this decision as you drip feed money into the market. This gives you an average price of the market and when it dips, allows you to buy more units at a cheaper price. Please note, as investments can fall in value you could get back less than you invest. They should be held for the long term.

How much can I contribute?

Any UK resident under 75 can contribute to a SIPP and receive tax relief. As a general rule, you can contribute as much as you earn to pensions, subject to the £40,000 annual allowance (as little as £10,000 for some high earners and £4,000 for some people who have already accessed a pension). The exact amount and tax reliefs available will depend on your individual circumstances.

How much can I contribute?

If you earn below £3,600 per annum you can contribute £300 a month. Because of the added tax relief only £240 would be deducted from your bank account.

Please note, you must take all your pension contributions in this tax year into account when calculating how much you can contribute each month.

How do regular savings work?

We collect the money from your bank account on the 7th of the month and place your investment on the 10th of the month. If either of these days is not a working day the transaction will happen on the next working day.

Your basic-rate tax relief will be received 10-11 weeks later and invested in the same funds as the contribution. If you invest in shares, it will be held as cash. Any higher or additional-rate tax relief due would be claimed by you directly through your local tax office.

Where can I invest my regular savings?

With the Vantage SIPP you make all your own investment choices without advice. You can choose from more than 2,500 funds and FTSE 350 shares. If you're not sure where to invest, our Wealth 150, which comprises our favourite funds in each sector, could be a great place to start.

There are no dealing charges for funds and a low dealing charge of £1.50 a month for shares.

View our SIPP investment ideas

Set up a regular savings plan now

Start saving monthly from as little as £25 a month into the Vantage SIPP (a payment of just £20, to which the government will automatically add £5 tax relief).

Start your SIPP Log in