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What is a SIPP hero

What is a SIPP?

Understanding the basics

Pensions were created to help us save for retirement. But most traditional pensions don’t give you the flexibility to invest where you want to. And it’s not always easy to see or understand what’s happening with your money.

A self-invested personal pension, or SIPP, is a type of pension that opens the doors, so you can choose your own investments from a large selection.

SIPPs also make it easy for you to manage your pension. You can see how it’s doing online at any time, making changes whenever you like. That way you can breathe life into your pension and ultimately determine how you enjoy your retirement.

Tax benefits

SIPPs work much the same way as other personal pensions. You add money to your pension as and when you like. The government pays in an extra 20% in pension tax relief.

If you pay a higher rate of tax, you’ll usually be able to claim back even more with your tax return. Once it’s in your SIPP, your money can grow free from UK capital gains and UK income tax. The tax benefits will depend on your individual circumstances and tax rules are subject to change.

Learn more about SIPP tax benefits

Government adds tax relief of 20% for basic-rate payers

Personal Pension or SIPP?

Traditional personal pensions tend to offer between a dozen and several hundred funds. But their charges can be hefty, particularly on older plans. Stakeholder pensions have lower charges, but tend to offer a more limited choice of funds.

The wide investment choice in SIPPs can make a significant difference to your pension. That’s because how your investments perform can have a large impact on the size of your pension pot and eventually your retirement.

Taking money from your SIPP

When you reach your 55th birthday (or your 57th from 2028), you’re free to start withdrawing money from your SIPP, even if you’re still working. You can usually take up to 25% of your pot tax free. The rest of your withdrawals will be taxed as income.

Learn more about your retirement options

Start your HL SIPP

Once you’ve read all the important information and decided to open a SIPP, it takes less than five minutes to get started. You’ll just need a debit card and your national insurance number to hand if you’re going to make a lump sum contribution. If you’d like to set up a direct debit, you just need your national insurance number and bank details. Remember that your investments can go down as well as up in value, so you could get back less than you put in.

Do-it-yourself

Open your HL SIPP and then choose from:

  • Over 2,500 funds
  • UK and overseas shares
  • Investment trusts, bonds and exchange-traded funds (ETFs)

You can start your SIPP with £100 or from as little as £25 per month. You can hold cash in your SIPP until you’re ready to invest, or choose investments straightaway.

Ready-made

Prefer not to choose individual investments? You can select a ready-made portfolio for your SIPP instead.

We’ll choose the investments for you and look after the day-to-day management. You’ll just need to keep an eye on it to make sure it’s still right for you.

You can start a ready-made SIPP with £1,000 or more.

New to SIPPs?

Have a look at our Guide to SIPPs to find out more about how SIPPs work and how to get started.