The best SIPP provider for managing and making your own investments is AJ Bell. They’re low cost and have a huge range of investment options. For modern SIPPs, where experts handle things, the best is PensionBee – it’s low cost, and has a great track record.
Ready to get saving within an SIPP (self-invested personal pension)? Or perhaps you've already got a pension and want to transfer it to the best SIPP provider? We’ve got you covered. Here’s the best SIPP providers (companies that offer a SIPP).
Best SIPP providers - self-managed
The best low cost SIPP providers to manage your own investments:
Best SIPP provider
AJ Bell tops the list – they’re low cost with a huge range of investment options.
Interactive Investor is a popular investment platform with a flat fee, making it a cheap option if you have over £30,000 of investments. There’s a huge range to choose from, their website and apps are great and their customer service is excellent.
If you want a more traditional approach, with a long established history then Hargreaves Lansdown could be for you. It’s a great broker with a huge range of investment options, including expert-managed choices. However, it’s more expensive than other options.
The best modern SIPPs – with easy and simple investment options:
PensionBee are leading the way with modernising pensions. The investment options are great for many pension savers, it’s an awesome app and website, which are both easy to use, and have tools and charts to show you how your money is growing – and importantly, how to hit your retirement goals.
It's easy to set up and get going, you can start a brand new pension, or simply transfer your existing pensions across.
You’ll pay one simple fee that decreases the more you save.
Fees: low (0.5% to 0.75%) for their core plans
Our friends at PensionBee will contribute £50 to your pension when you open a PensionBee account.
Penfold is a great app to get you going, with simple pension fund options to choose from and awesome features on the app to view your money at any time. Plus simple tables and charts to work out how much you should be investing to hit your retirement goals.
You don’t need an existing pension to use it, but if you do have one, or a few, you can move those overs too.
Investing in a pension is highly recommended for saving for your future, there’s lots of benefits, which will cover below – but finding the right self-invested personal pension provider for you can be a bit of a challenge. Don’t worry though, we’ve reviewed almost all of them to narrow down to the best SIPP providers, making it nice and easy for you to pick the right one for you.
Here’s the criteria we used to review pension providers:
Range of investments
Ease of use
There’s a range of SIPP providers out there, but we’re just showing you the best pension providers. They’re ones we recommend to our friends and family (and readers of course), and use ourselves here at Nuts About Money. So, whichever one you choose, you can be confident, you’re using one of the best providers out there.
What is a personal pension?
A personal pension is a hidden gem that allows you to build a nice big retirement income for you later in life. It’s different to the pension you could get from the government when you retire (which is called the State Pension), and it’s different to a pension your employer sets up for you (if you’re employed), called a workplace pension.
A personal pension is all yours, one that you look after, decide how much money to pay into it, and which provider to use. And ultimately when you’d like to withdraw from it – as long as you’re over 55 (57 from 2028).
It’s technically a type of private pension, which simply means it’s not the government pension, it’s a pension all in your name (private to you), which you manage (a workplace pension is also a private pension).
There’s some great benefits with personal pensions too – you’ll automatically get a whopping 25% bonus from the government on everything you put in, and your retirement savings will grow completely tax-free – so your money will grow much more over time (compared to outside of a pension), and you won’t have to worry about any paperwork or any admin on any taxes either.
There are some restrictions however, you can only pay in as much as your total income per tax year (e.g. your salary), or £60,000, whichever is lower. (A tax year runs from April 6th to April 5th the following year.)
And, as we mentioned, you can only start withdrawing money from the age of 55 (57 from 2028).
25% Government bonus
As saving for retirement is intended to be tax-free, with a personal pension, you’ll actually get the tax you’ve paid on your income, refunded by the government straight into your pension pot, on your SIPP contributions.
That means you’ll get a massive 25% bonus from the government, on everything you pay into your personal pension. How great is that?!
This is a form of Income Tax relief, and the 25% is the basic rate tax relief, as it refunds tax you’ve paid at the basic rate (20%). If you’re a higher rate taxpayer (40%), or an additional rate taxpayer (45%), you can claim some tax back at these rates too – which you’ll need to do on a Self Assessment tax return.
Your money grows tax-free
As your money grows over time within your pension, you won’t have to worry about paying any tax, which you might have to pay if you were investing outside of a pension (or a Stocks and Shares ISA), such as within a General Investment Account (GIA).
The tax you might otherwise have to pay is Capital Gains Tax, Income Tax and Dividend Tax.
However, it’s not entirely tax-free. When you actually take your pension (withdraw money), the first 25% is completely tax-free, and you can take this as a tax-free lump sum if you like.
But with the remaining 75%, you might have to pay Income Tax, depending on what your total income is at the time – it would work just the same as your salary (income) now. Although you’ll still get a tax-free annual allowance on your income too, which is currently £12,570 per year.
Types of personal pensions
Here’s where things get a bit more complicated, there’s two types of personal pensions, one is simply a ‘personal pension’, and the other is a ‘self-invested personal pension’ (SIPP).
Regular personal pension
These are the most common types of pensions, and typically, these are managed by experts, who will grow your money over time using sensible investment strategies. These are similar to modern SIPPs (managed by experts), which are often preferred by people these days – we’ll cover just below.
Self-invested personal pension (SIPP)
A classic self-invested personal pension is where you decide which investments to make, typically from a wide range, and you’ll put together the right mix of investments to suit your investment strategy.
There’s also modern SIPPs, which are a great option, and these are where the investments are managed by experts, just like a regular personal pension, but you’ll pick from a few simple options, such as how much risk you’d like to take with your money, or options such as if you’d prefer ethical investments (no fossil fuel companies etc.).
Then, the experts take care of the rest, and aim to grow your money over time, ready for retirement. Two great options are PensionBee¹ and Penfold¹.
You might be thinking you’ll get the government pension (State Pension) when you retire (at 66), and maybe are also saving into a workplace pension with your employer, so why open a personal pension as well?
Well, building up a pension pot that can pay for a good standard of living in retirement is becoming quite a challenge, and personal pensions are becoming essential.
The average pension pot in the UK, for those aged 35-44 is £30,000, and this is lower for those younger, and only a bit higher for those older, but unfortunately, it’s not enough to provide for a good standard of living in retirement.
The actual average retirement income is £361 per week, or £18,722 per year, including receiving the full State Pension. That’s actually less than minimum wage.
It’s just about enough to get by on in retirement (at today's prices), with no luxuries, no car, or holidays, but is below the current suggested income of £20,800 for a moderate level of living, and far below a comfortable level, of £33,600.
In order to boost your pension pot to provide those higher levels of income, the best idea is typically to save into a personal pension, and benefit from the government bonus and tax-free saving. You’ll really be surprised by how much your money can grow over time if you regularly save into one (and save as early as you can!).
Which is the best SIPP provider for beginners?
If you’re new to investing and pensions in general, it’s often best to let the experts handle things. And even if you’re experienced, it’s often best to let the experts handle things too! They know what they’re doing and will grow your money over time in the right way, and you’ll benefit from all the lovely benefits of a personal pension.
With that in mind, we recommend using an expert-managed pension, such as PensionBee¹.
If you do want to manage your own investments within a classic SIPP, check out AJ Bell¹. They’re one of the cheapest, and have a great range of investment options, plus some handy guides to help you along the way.
Which is the cheapest SIPP provider?
The cheapest traditional SIPP provider overall is Vanguard. The annual fee for an SIPP is 0.15% per year, and capped at £375 per year. However there are other costs too, such as trading fees and fund fees.
Vanguard are pretty great, however we don’t recommend them for most people, as the range of investments is very limited (you can only buy Vanguard investment funds). And, you’ll need to start with at least £500 or contribute a minimum of £100 per month. Plus, you’ll only really benefit from the lower annual fee if you have a very large pension balance (over £250,000).
We recommend most people use AJ Bell¹ for a traditional self-invested personal pension (making their own investments). The investment range is huge, and includes stocks and shares as well as investment funds (explained below). The annual fee is still very low, at just 0.25% per year (for investment funds), and reduces as you save more. You can learn more with our AJ Bell review.
What’s the best pension for self-employed people?
If you’re self-employed, you won’t be paying into a workplace pension, as they’re exclusively for employed people – which means a personal pension is even more important – they’re pretty much your only option to save for retirement.
We recommend saving with a modern SIPP provider, such as PensionBee¹, they’re super easy to use, have a great record of growing pensions over time, and have low fees. Plus, you can manage everything on an easy to use app on your phone, and the customer service is great.
You could also check out Penfold¹, they’re very similar, and have a great app too.
If you’re a company director, you can also save directly into your own personal pension using your company bank account. This means you could save a bit more cash, reduce your Corporation Tax, and increase the amount you can pay in (if you’re only paying yourself a small salary).
Within a self-invested personal pension, you can decide which investments you want to make, and these can include stocks and shares and investment funds (which can even include bonds and property).
Stocks and shares (equities)
Shares represent small parts of the ownership of a company, they’re a ‘share’ of the company. Shares are typically traded (bought and sold) on stock exchanges across the world, such as the London Stock Exchange (LSE) in the UK, and the New York Stock Exchange (NYSE), in the US.
All the shares of a company combined, equal the overall value of the company. The value of each share can go up and down depending on the performance of the business (such as sales), or the stock market in general.
Investment funds are a collection of lots of different investments, all pooled together into a single investment, and they’re super popular. They provide a great way to build a well diversified investment portfolio (your total investments), as you only need to buy a share of an investment fund, rather than lots of different investments – saving you a lot of time, and money in trading fees.
Investment funds can also be traded on stock exchanges, and these are called exchange-traded funds (ETFs). If you only want to buy ETFs, check out the best ETF platforms, and InvestEngine¹, they’re completely fee-free (however, they don't offer a pension).
There’s two types of investment funds, either passive, or actively managed funds. Passive funds typically track a stock market index, which is a set group of stocks, such as the S&P 500 (the largest 500 companies in the US), or the FTSE 100 (the largest 100 companies in the UK), for this reason they’re also often called index funds.
Actively managed funds are where a fund manager is making the investment decisions to achieve the goal of the fund (such as long-term growth or provide a regular income).
Bonds are effectively loans to large corporations and governments in return for interest payments. They’re typically seen as safer than stocks and shares, but typically grow your money much less.
This is typically commercial property, such as office buildings and shops, that pay rent regularly, and so provide an income. You’ll typically buy these through an investment fund.
With self-invested personal pensions, you’ll pay a range of fees, depending on what type of investments you want to make.
Traditional SIPPs, where you make your own investments, can be cheaper than expert-managed pensions overall, as there’s less (no) work for the experts to do. But, it all depends on the investments you want to make, and of course, you’ll be spending time managing your investments.
Account fees (platform fees)
The pension provider itself will typically charge a fee to manage your pension account, which is often called an annual administration fee, or platform fee.
It’s normally a fee on the total amount of your investments and charged each year, and can range from 0.15% to 1%+ per year depending on the pension provider. It can sometimes be a flat fee too (e.g. £19.99 per month).
Investment fund fees
Most pension investments are within investment funds (pension funds), and these typically charge an annual fee too. The amount depends on the fund itself, and can range from 0.05% to 1.5%+. Passive funds are often lower cost than actively managed funds as there's less work to do by the fund managers.
Some funds also have trading fees, which are fees when they buy and sell investments, these are normally around 0.07% per year.
Share dealing fees
If you’re buying and selling your own investments such as stocks and shares, and investment funds, you’ll normally pay a share dealing fee too.
This is a fee for the stock broker (the pension provider) to buy and sell investments for you, and you’ll pay it each time you buy or sell an investment. This can sometimes be free (commission-free), or range from £1.50 to £11.95, it all depends on the broker you choose. AJ Bell¹ is typically the lowest cost for this (for pensions).
If you want to transfer an existing pension, and move all of your investments from one provider to another, there might be transfer fees. These are typically the same as the dealing costs, and apply per investment, but can vary, and sometimes there won’t be any fees at all.
On some very old pensions, there might be exit fees, which is a fee to the pension provider to transfer your whole pension from them to another provider (pension company). These fees aren’t allowed on modern pensions.
If you do have them, they can be fairly expensive, so if you’re not sure what to do, it can be a good idea to get independent financial advice by speaking to a financial advisor.
Is investing within a SIPP safe?
Yep, it’s safe to save and invest within an SIPP with any of the best providers above.
SIPP providers have to be authorised by the Financial Conduct Authority (FCA), who are the people who make sure financial companies are looking after their customers and their money. That means pension providers are reviewed and approved, and are continually monitored.
This also means your money is protected by the Financial Services Compensation Scheme (FSCS). This gives you protection of up to £85,000 compensation if your SIPP provider were to go out of business.
However, your money would actually be within the investments themselves, and these are held with large banks, such as HSBC or BlackRock, all in your name, and can only be returned to you.
This doesn’t mean the value of your investments can’t go down. But remember, saving for retirement is investing for the long-term.
There we have it, the best SIPP providers, and a run through of why saving into a personal pension and building your pension savings overall is a great decision for your future.
You can save up to £60,000 per tax year (or as much as your total income), and benefit from a massive 25% bonus from the government on everything you pay in. Your money will also grow completely tax-free, so no Capital Gains Tax to worry about. (Although you might pay tax when you start withdrawing it.)
There’s two main types of SIPPs, a classic SIPP, where you make all the investment decisions, and when to buy and sell (suited for experienced investors). Or, a modern SIPP, where you pick from a small range of investment options, which are all managed by experts (recommended for most people).
As a recap, the best SIPP provider (and cheapest) for a classic SIPP is AJ Bell¹ and the best modern SIPP, where experts handle things, is PensionBee¹.
And that’s all there is to it. All the best saving for your future!
Best SIPP provider
AJ Bell tops the list – they’re low cost with a huge range of investment options.
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