A SIPP is a personal pension where you control the investments. You can invest in shares funds ETFs and other assets with the same tax relief as other pensions.

How much can I contribute to a SIPP?

Up to 100% of your earnings or £60,000 per year whichever is lower. Unused allowance from the previous 3 years can be carried forward.

What is the tax relief on a SIPP?

Basic rate taxpayers receive 20% relief automatically. Higher rate taxpayers receive 40% and claim the extra 20% through self assessment.

pension ⏱ 3 min read 📅 Updated May 2026

What Is a SIPP? Self-Invested Personal Pension UK Guide 2026

Chandraketu Tripathi

Finance Editor, Kaeltripton

Published 3 Apr 2026

Last reviewed 9 May 2026

✓ Fact-checked

What Is a SIPP? Self-Invested Personal Pension UK Guide 2026

Part of: Best Pensions and Retirement UK 2026

Part of: Best SIPP UK 2026 ->

Pension Guide — April 2026

A SIPP (Self-Invested Personal Pension) is a personal pension that gives you full control over your investments. Unlike a workplace pension where your employer chooses the funds a SIPP lets you invest in shares bonds funds ETFs commercial property and more.

How a SIPP Works

Feature	Detail
Tax relief	20% for basic rate — government adds £25 for every £100 you contribute
Higher rate relief	Claim additional 20% via self assessment
Annual allowance	100% of earnings or £60,000 whichever is lower
Investment choice	Shares bonds funds ETFs investment trusts commercial property
Access age	57 from 2028 (currently 55)
Tax-free lump sum	25% of your pot
Inheritance	Can pass to beneficiaries often IHT-free

SIPP Tax Relief — The Numbers

Tax Rate	Your Contribution	HMRC Adds	Effective Cost	In Pension
Basic 20%	£800	£200	£800	£1,000
Higher 40%	£800	£200 + £200 via SA	£600	£1,000
Additional 45%	£800	£200 + £250 via SA	£550	£1,000

SIPP vs Workplace Pension

Factor	SIPP	Workplace Pension
Control	Full — choose own investments	Limited fund selection
Employer contributions	None	Minimum 3% by law
Investment choice	Very wide	Usually limited
Best for	Self-employed higher earners active investors	Most employees

Best SIPP Providers 2026

Provider	Annual Charge	Best For
Vanguard	0.15% capped at £375	Low cost index funds
Hargreaves Lansdown	0.45% capped at £200	Wide choice full service
AJ Bell	0.25% capped at £120	Balanced mid-market
Interactive Investor	£12.99/month flat	Frequent traders large pots

Bottom line: A SIPP is ideal for self-employed people and those wanting more investment control. Tax relief is the same as other pensions. Start with a low-cost index fund SIPP from Vanguard or AJ Bell and increase contributions as much as you can afford.

By Chandraketu Tripathi · Updated April 2026 · kaeltripton.com

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Editorial Disclaimer

The content on Kaeltripton.com is for informational and educational purposes only and does not constitute financial, investment, tax, legal or regulatory advice. Kaeltripton.com is not authorised or regulated by the Financial Conduct Authority (FCA) and is not a financial adviser, mortgage broker, insurance intermediary or investment firm. Nothing on this site should be construed as a personal recommendation. Rates, figures and product details are indicative only, subject to change without notice, and should always be verified directly with the relevant provider, HMRC, the FCA register, the Bank of England, Ofgem or other appropriate authority before any financial decision is made. Past performance is not a reliable indicator of future results. If you require regulated financial advice, please consult a qualified adviser authorised by the FCA.

Chandraketu Tripathi

Finance Editor · Kaeltripton.com

Chandraketu (CK) Tripathi, founder and lead editor of Kael Tripton. 22 years in finance and marketing across 23 markets. Writes on UK personal finance, tax, mortgages, insurance, energy, and investing. Sources: HMRC, FCA, Ofgem, BoE, ONS.