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How to choose a SIPP plan

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Do you consider yourself a savvy investor and want financial freedom when it comes to a pension? A self-invested personal pension, or SIPP plan, can be an attractive option.

Some people prefer the idea of a “do it yourself” pension. This is because they get to keep control over where their savings are invested. However, there are also high risks attached.

SIPPs can also be managed easily online. You can see at a glance how much money is in your pension and where it has been invested.

However, people seeking the freedom of a self-invested personal pension can sometimes be open to fraudsters. They look to make even the shrewest of investors part with their hard-earned money for little or no gain.

Things to consider before choosing a SIPP plan

Before selecting any SIPP provider, experts recommend that you have an idea in your head of what it is you want to do with your SIPP plan and want you’d like to get out of it.

Every SIPP provider will offer a different variety of investments. However, in a report from 2017, the Financial Conduct Authority found that most people with a SIPP were using their provider’s default option, rather than seeing if they could look for a better deal themselves.

Before investing in a SIPP plan you should also make sure you have considered all of available investment options out there, whether that’s buying and selling shares or investing in the long-term.

Be aware of anything that your potential SIPP provider might be promising you. If it sounds too good to be true, it probably is. For example, if they are promising short-term cash, high returns of a guaranteed income with little details about the actual scheme. It’s always worth doing some more research yourself.

Beware of the added fees and charges

Traditionally, a SIPP was there for those who had an above average pension sum. Therefore, the sizeable fees were seen as a worthwhile side effect. However, with the low-cost SIPPs being added into the mix, you need to be aware of the possible side effects of fees and charges.

The set-up fee: Just setting up a SIPP can entail paying a hefty set-up fee, whereas some might have fees into the hundreds. So make sure you do your research before opening your SIPP.

Annual management charges: It is possible that you may be charged an annual fee to administer your SIPP. This could also be charged multiple times dependent on whether you’re in an open-ended investment company. Make sure to check the small print of this clause before you accept.

Dealing charges: Some companies will add a fee for buying or selling shares. A Stamp Duty will also be an added charge onto selling or buying shares.

Exit fees: If you are considering transferring to a SIPP, be aware of any exit fees you may have agreed to in your current pension policy.


Watch out for a scam

All investments have an element of risk. However, unregulated ones like storage pods, overseas property schemes, and burial plots, don’t have any compensation at the ready in case they fail. This means investors could lose everything.


If you’ve been mis-sold a SIPP, we can help claim the money back. Get in touch with our expert legal team today.