Finance glossary
SIPP — Self-Invested Personal Pension
Also known as: Self-Invested Personal Pension
In simple terms
A SIPP is a personal pension that lets you choose and manage your own investments, while still getting the usual pension tax relief on what you pay in.
On this page
What does SIPP mean?
A Self-Invested Personal Pension is a type of personal pension that gives you a much wider choice of investments — such as funds, shares and trackers — and lets you make the decisions yourself or with an adviser.
Like other pensions, money paid in usually attracts tax relief, and it grows free of UK income and capital gains tax.
How a SIPP works
You (or your adviser) pick the investments from the provider’s range and can change them over time. From the normal minimum pension age you can usually take up to 25% tax-free, with the rest taxed as income when withdrawn.
Providers charge fees for running the SIPP and for the investments, so costs matter to the end result.
How could this affect me?
A SIPP offers flexibility and control, which suits confident investors — but with that control comes responsibility for the choices and the risk that investments fall in value.
For many people a simpler workplace or personal pension is enough; a SIPP makes most sense if you want a broad investment choice and are comfortable managing it.
Things to watch out for
- You carry the responsibility — and the risk — for your investment choices.
- Fees on the SIPP and the investments both eat into returns.
- Pension money is normally locked away until age 55 (rising to 57 from April 2028).
Know your rights
- Pension contributions generally receive tax relief, and pensions grow free of UK income and capital gains tax (GOV.UK rules).
- If an authorised SIPP provider fails, the FSCS may protect you — but it does not cover ordinary investment losses.
- You can get free, impartial guidance from Pension Wise/MoneyHelper, and complain to the Financial Ombudsman Service or The Pensions Ombudsman.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- MoneyHelper, Self-invested personal pensions (SIPPs) (opens in a new tab). Accessed 22 Aug 2026.
- GOV.UK, Tax on your private pension contributions (opens in a new tab). Accessed 22 Aug 2026.