What is a SIPP?

The Basics

A SIPP is a pension for people who want to be in control of making their own investment decisions. Pensions are for your retirement, so you wouldn’t access your money until any time after your 55th birthday (57 from 2028) onwards.

  • Pensions can help us save for retirement. However, most standard pensions don’t give you the flexibility to invest how you want.
  • A SIPP allows you to choose your own investments. This is important as it could mean you spread your risk further to try to weather any market volatility, and help grow your pension pot.
  • SIPPs also make it easy to manage your pension. You can log on to check your investments at any time and make changes whenever you like. 

Pension tax relief

Tax relief

You could receive up to 45% tax relief in your pension. Scottish tax payers receive up to 46% tax relief.

HMRC tax relief

HM Revenue & Customs (HMRC) will add 20% in tax relief. So if you put £8,000 in your SIPP, they will add an extra £2,000.

Higher tax payers

If you pay 40% income tax, you can claim back up to an extra 20% on your tax return.

Could a SIPP be right for you?

Could a SIPP be right for you?

  • Are you looking to build up a pension fund in a tax-efficient way?
  • Are you prepared to commit to having your money tied up until at least age 55?
  • Do you want access to wider investment opportunities, and choose from a wide range of stocks and shares?  

Adding money to your SIPP

Adding money to your SIPP

  • The maximum amount you can contribute to your SIPP (including all sources) is £60,000 each tax year.
  • If you are employed, your employer can make contributions into your SIPP.
  • The Lifetime Allowance limit is currently £1,073,000 and if your pension fund exceeds that amount, it could be subject to an additional tax charge. This tax charge will be removed from 6th April 2023 and the Lifetime Allowance completely abolished from 6th April 2024. This change means you can save as much as you want into your pension fund without an extra tax charge. Please note, whilst you can still take tax free cash from your pension, the amount you can take will be limited going forward.
  • Lump sum - Any amount over your lifetime allowance that you take as a lump sum is taxed at 55%.
  • Income - Any amount over your lifetime allowance that you take as income attracts a tax charge of 25%.

SIPP Key Features (PDF, 163 KB)

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.

SIPP Beneficiaries

When you die your SIPP can be passed to your beneficiaries, which in most cases is free from inheritance tax.

  • If you die before you’re 75, your beneficiaries can withdraw what they choose from your pension without paying tax.
  • If you die after your 75th birthday, withdrawals will be taxed as the beneficiary’s income, this depends on their withdrawals and other income.

You can nominate one or more beneficiaries. This is usually a spouse or child, but it can be anyone you like and any number of people.

SIPP interest rates

The Self-Invested Personal Pension (SIPP) will pay interest on any cash balance of £1 or above held in the account. Interest is accrued daily and paid gross annually in March. The interest rate payable on our Self-Invested Personal Pension (SIPP) is variable at 3.55% (Gross/AER).

The current rates that are applicable are shown below.

Balance

Interest Rate (Gross)/AER

Date Effective

Balance

£1 and above

Interest Rate (Gross)/AER

3.55%

Date Effective

31/08/2023

Balance

£1 and above

Interest Rate (Gross)/AER

2.65%

Date Effective

23/03/2023

Balance

£1 and above

Interest Rate (Gross)/AER

2.45%

Date Effective

19/01/2023

Balance

£1 and above

Interest Rate (Gross)/AER

1.30%

Date Effective

07/10/2022

Interest rates are subject to variation. The amount you receive may change depending on the interest rate IWeb Share Dealing receives on the cash balances we hold across all accounts and market rates.

The rates we receive can be above or below the prevailing base rate for cash held within your SIPP. We use any payments received to pay you interest at the rates shown on our website. We may retain the amount received above these rates to keep costs low.

There is currently no requirement for you to hold a minimum amount in cash, although you should ensure that there is sufficient cash held to cover charges when they are due for payment.

AER (Annual Equivalent Rate) - this illustrates what the interest rate would be if interest was paid and compounded once each year.

Gross rate means we will not deduct tax from the interest we pay on money in your account. It’s your responsibility to pay any tax you may owe to HM Revenue and Customs (HMRC).

Transfer to a SIPP

Transfer to a SIPP

If you’d like to switch your pension to IWeb there are a number of things you’ll need to consider before starting the transfer. If you are not sure about transferring, seek independent advice. There will normally be a charge for that advice.

  • Not all pensions are transferable - please contact your current provider first to find out if you’re able to transfer.
  • Exit and transfer fees may apply with your existing pension provider.
  • You may lose out on potential pension benefits with your current provider if you choose to transfer out.
  • Costs vary between pension providers so it’s important to familiarise yourself with these differences.


Start a transfer

Ready to start a SIPP

Ready to start a SIPP

  • Helps you save tax efficiently for your retirement
  • Gives you freedom to choose where you want to invest your money and spreads your risk
  • Provides income in the form of lump sums and/or regular income in retirement
Start a SIPP

Still unsure?

Still unsure?

  • Read our Benefits Guide (PDF, 147KB) which has been designed to help you make the right choices when deciding what benefits to take from your SIPP.
  • If you want to learn more about your retirement options the Pension Wise service provides impartial guidance.
AJ Bell logo

Our SIPP is administered by AJ Bell.

Pensions are a long-term investment. The retirement benefits you receive from your pension account will depend on a number of factors including the value of your account when you decide to take your benefits which isn't guaranteed, and can go down as well as up. The value of your account could fall below the amount paid in. Tax treatment depends on individual circumstances and may be subject to change in the future.

AJ Bell Management Limited is the Scheme Administrator of the IWeb Share Dealing SIPP. AJ Bell Management Limited is registered in England No. 3948391. Registered Office: 4 Exchange Quay, Salford Quays, Manchester M5 3EE.

Authorised and regulated by the Financial Conduct Authority and on the FCA register under FCA register number 211468. Sippdeal Trustees Limited is a wholly owned subsidiary of AJ Bell Management Limited, registered in England No. 4050222. Registered Office: 4 Exchange Quay, Salford Quays, Manchester M5 3EE. Sippdeal Trustees Limited does not conduct any regulated activities, and is, therefore, not regulated.

Dealing and stock broking administration services are provided by the IWeb Share Dealing Service which is operated by Halifax Share Dealing Limited. Registered in England and Wales No. 3195646. Registered Office: Trinity Road, Halifax, West Yorkshire HX1 2RG. Authorised and regulated by the Financial Conduct Authority under registration number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.