SIPP Calculator — Self-Invested Pension

A Self-Invested Personal Pension runs on relief at source, so you pay in net of basic rate tax and the provider reclaims 20% from HMRC on your behalf. Put in £800 and £1,000 arrives in the SIPP. Higher and additional rate taxpayers collect the further 20% or 25% through their self-assessment return. What separates a SIPP from other personal pensions is the range of things it can hold, including funds, shares, ETFs, investment trusts and, on some plans, commercial property.

Projections compound your regular contributions together with the tax relief added to them. A £400 monthly contribution becomes £500 gross once basic rate relief lands, and at 5% annual growth, net of platform and fund charges, £500 a month over 25 years builds to roughly £298,000. Since so much rests on that growth assumption, three scenarios are worth running rather than one: cautious at 3%, moderate at 5% and adventurous at 7%. The distance between those three lines is the honest measure of how uncertain any long projection really is.

Access begins at 55, rising to 57 from April 2028 under the Finance Act 2022. From that point 25% of the pot can be taken as a tax-free lump sum and the remainder drawn as taxable income through flexi-access drawdown. A projection therefore has two halves, the accumulation years of contributions and growth, and the decumulation years when withdrawals run the pot down. It is the second half that decides whether the money lasts, because the withdrawal rate matters more there than the growth rate does.

The difference from a workplace pension is control. A workplace scheme typically offers 10 to 20 pre-selected funds, whereas a SIPP opens up UK and international funds, individual shares, bonds, REITs and, on premium plans, commercial property. That freedom carries a price: platform fees of 0.2 to 0.45% sit on top of fund charges, against 0.1 to 0.3% inside a workplace scheme. SIPPs suit engaged investors with pots of £20k or more, where the wider choice earns back the extra cost.

Charging structures vary enough to change the outcome. Hargreaves Lansdown charges 0.35% on the first £250k (cut from 0.45% in March 2026) for a premium service, AJ Bell 0.25%, and Vanguard's Personal Pension 0.15%, though Vanguard restricts you to its own funds and works out cheapest below £80k. Interactive Investor charges a flat £12 a month, which suits pots above £50k, and Bestinvest and Charles Stanley Direct compete alongside them. Weigh fee structure, fund range, app quality and customer service together, and bear in mind that moving between providers later is straightforward if your circumstances change.

Asset allocation usually shifts with age, from something like 80% equities and 20% bonds for a 30-year-old to 60/40 by 50 and 40/60 by 65. Low-cost index funds such as Vanguard FTSE All-World or iShares Core MSCI World tend to make the sensible core, having beaten more than 80% of active funds over 20 years in the S&P SPIVA reports. Individual stocks concentrate risk in a pot you cannot easily rebuild, high-fee active funds drag on returns for decades, and crypto or commodity ETFs bring regulatory complications inside a pension wrapper.

Order of contributions matters as much as choice of fund. Claim any employer match in the workplace scheme first, because nobody else is offering you free money, then use the SIPP for saving beyond it. Old workplace pensions left behind at previous employers are often worth consolidating into a SIPP for easier management, better investment choice, lower fees and a single point of administration. Defined benefit pensions are the exception, and should never be transferred without specialist FCA-regulated advice, since they are almost always worth more left exactly where they are.