A SIPP, or self-invested personal pension, is a type of personal pension that lets the holder choose and manage the underlying investments. It carries the same tax relief and access rules as other registered pensions but offers a wider investment range.
In one line: A SIPP is a personal pension that gives the holder control over which investments the pot is held in.
How a SIPP works
SIPPs are registered pension schemes overseen by HMRC for tax and by the FCA for the providers. Contributions attract tax relief at the saver's marginal rate, within the 2026-27 annual allowance of 60,000 GBP (HMRC).
For example, a basic-rate taxpayer paying 800 GBP into a SIPP has it topped up to 1,000 GBP by 20% tax relief. A higher-rate taxpayer can reclaim a further 200 GBP through self-assessment.
The holder can pick shares, funds, ETFs and commercial property within the SIPP. Platform and dealing charges apply, so cost matters more for hands-on investors.
SIPP vs a workplace pension
A workplace pension is arranged by an employer, often with limited fund choice and an employer contribution. A SIPP is set up by the individual and offers far broader investment control but no employer top-up.
Both share the same tax relief and the standard minimum access age, so the main difference is who runs the scheme and how much choice it gives.
Primary source: GOV.UK: Personal pensions