- To make the most out of your Self Invested Personal Pension (Sipp) you must first pick the correct provider
- In this free guide, we reveal the Top Rated Sipp providers in the UK, as voted for by IC readers
Pension planning has come on in leaps and bounds in recent years, thanks to the arrival of pensions freedoms combined with the development of Self Invested Personal Pensions (Sipps), now in their fourth decade. Where once savers were limited to a choice of whichever funds their pension provider deemed relevant, they are now able to control their investments all the way up to and beyond the point of retirement and can choose for themselves from a wide range of assets, including shares, funds, investment trusts and commercial property.
Sipps are split into two types: full and simple (or lite). The former offers a broad suite of investment options including commercial property. If you want to hold property within a Sipp, you have to pay a number of fees such as property and land management fees, and mortgage fees. The costs and considerations depend on your individual circumstances, so it is worth speaking to a full-service Sipp provider.
For general dealing accounts, the most suitable Sipp provider depends on what you invest in, how often you deal and whether you are in the accumulation or drawdown phase. If you are starting off on your Sipp journey, a platform that charges a percentage of assets rather than a flat fee might be your best option.
Picking a platform - the impact of costs
Cost is not the only consideration, but understandably many investors will place this front and centre when choosing a provider, as charges can erode both capital and potential income. Given that Sipps are a long-term product, the key thing to be aware of is how costs can rack up over time.
But a challenge for investors, for comparison purposes at least, is that there is no uniform charging structure across providers. To complicate things further, some providers include VAT on transactions (such as opening an account, annual administration, closure and transferring out) in the quoted fee, while others do not.
Charges are applied in two ways: either a fixed amount or as a percentage of the value. These are then deducted either as a one-off payment, or annually – the initial set-up cost of the plan is an example of the former. As a general rule, percentage-based charges are better for smaller pots, while large pots should benefit from tiered or fixed account charges.
It is also important to consider dealing fees. Across most platforms, the dealing fees applied to funds is very low to non-existent, but sharedealing fees can be significantly higher. This can quickly cancel out the effect of the listed security fee cap if you deal a lot.
You can download our full spreadsheet to compare all the costs of the biggest low cost SIPP platforms in London.
Picking a platform - the importance of service
Using a platform with an easily navigable website and a person to speak to if you need to ask questions can save you a lot of time and stress. If you value being able to speak to someone quickly, the lowest cost basic platforms may not be the best option, check out our Full SIPP comparison for more detail of these services.
If you want to be able to access your Sipp account via a tablet or smartphone, you should consider the sophistication of a platform’s mobile service.
Our rolling survey tool collects feedback on many different platforms to help everyone make the right choice. In the table below you can read the rankings for the most popular platforms.
|Sipp - Top Rated|
|Platform||Website and app accessibility||Value for money||Customer service||Data and research||Range of investments||Average|
|AJ Bell Youinvest||4.35||3.88||3.85||3.61||4.1||3.96|
|Fidelity Personal Investing||3.58||3.33||3.58||3.25||3.17||3.38|
Source: IC platform and broker survey, March 2021
Picking a platform - range of investments
Highly rated Freetrade and Vanguard (not included in the above table because of a low number of respondants to the questionnaire) offer some of the lowest cost Sipps available. However, with Freetrade you can only invest in listed securities, and Vanguard only offers its own 77 funds, most of which are passive. Most of the other major platforms have over 2,500 funds to choose from.
“A cheap plan is useless if it doesn’t offer the required investments,” say experts. “Vanguard prices are really competitive, but unless you’re happy investing only in its funds, then it won’t do the job.” If you are more adventurous and want to invest directly in shares, have a look at what stock markets an investment platform offers access to.
If you want to hold assets other than funds or listed securities in your Sipp, such as commercial property, you will need to open a Sipp with a specialist provider. This is because mainstream DIY investment platforms do not offer such options. However, a so-called 'full service' Sipp from a specialist provider that offers a wider choice of investments is likely to have higher charges.