Should You Open a SIPP? Checklist
Work through each decision item to determine if a SIPP is right for you.
0 of 10 items completed
1. Consider your employment status
Are you self-employed, a contractor, or an employee without a workplace pension? SIPPs are particularly valuable for self-employed individuals.
2. Assess your investment knowledge
SIPPs suit people comfortable choosing their own investments. If you prefer a hands-off approach, a standard personal pension or workplace pension may be better.
3. Check your contribution capacity
Ensure you have additional funds beyond your workplace pension contributions. Remember the Annual Allowance is £60,000 across all pensions for 2024/25.
4. Review your existing pensions
Do you have old workplace pensions with high charges or limited investment options? Consolidating them into a SIPP could reduce costs and simplify management.
5. Identify the investments you want
SIPPs offer access to stocks, shares, funds, bonds, and commercial property. Check that your desired investments are available through any SIPP provider you are considering.
6. Compare SIPP providers
Look at platform fees, dealing charges, fund costs, and the range of investments available. Some providers charge flat fees, others percentage-based.
7. Understand the charges involved
SIPPs typically have annual platform fees, dealing commissions, and fund management charges. Higher charges can significantly reduce your returns over time.
8. Consider how you will claim tax relief
Basic rate relief is automatic, but higher and additional rate taxpayers must claim additional relief through Self Assessment. Ensure you understand this process.
9. Plan your retirement timeline
When do you plan to retire? Your SIPP can usually be accessed from age 55 (57 from 2028). Factor this into your overall retirement plan.
10. Review death benefit nomination
Decide who you want to leave your SIPP to. You can nominate beneficiaries, and SIPP funds can usually be passed on free of Inheritance Tax if you die before 75.