Grow your retirement savings with a low‑cost personal pension

A SIPP, or a Self‑Invested Personal Pension, is a specialised pension scheme available in the United Kingdom. Unlike traditional pension plans, SIPPs offer individuals a much broader range of investment options and greater control over their retirement savings.

The key feature of a SIPP is that it offers a level of autonomy and flexibility that traditional pension plans do not. This means that individuals can tailor their investments to align with their risk tolerance, financial goals, and investment preferences.

On our platform eligible clients can make use of all the traditional InvestEngine products such as Managed Growth Portoflios, Savings Plans, Rebalance, AutoInvest, and more, all within the pension ‘tax‑wrapper’. 

Moreover, SIPPs come with tax advantages. Contributions made to a SIPP are typically tax‑deductible, and investments grow tax‑free. However, there are limits on contributions and restrictions on when you can access your funds, usually linked to the age of retirement.

In summary, a SIPP is a versatile retirement savings vehicle that empowers individuals to take charge of their pension investments, offering a diverse range of asset choices and tax benefits while adhering to pension regulations and rules in the UK.

Further information on SIPP terms and what they mean can be found here. 

In the UK, a Self‑Invested Personal Pension (SIPP) is available to a wide range of individuals who want to save for their retirement. However, there are some eligibility and age restrictions to keep in mind. Here are the key points regarding who can open a SIPP:

1. Age Requirement: You can open a SIPP if you are 18 years old or older, up to a maximum age of 75.

2. Residency: You need to be a UK resident to open an InvestEngine SIPP and you should be a UK taxpayer to benefit from tax relief on your contributions. Non‑residents can open SIPPs (unfortunately not with InvestEngine), and they may not receive the same tax benefits. 

3. Employment Status: You do not need to be employed to open a SIPP. It is available to employed individuals, self‑employed individuals, and those who are not working.

You can open your InvestEngine SIPP with just £100 for a Managed Portfolio.
The minimum investment for clients wanting to open a DIY SIPP portfolio is £100. Regular contributions are optional and the minimum is £20 a week or £50 a month.

Further information on how to fund your portfolios can be found here.

Who can pay contributions to my InvestEngine Pension Plan?

At present, we only accept personal contributions paid by you.

In order for you to be able to gain tax relief on your personal contributions you need to be a UK resident or you have relevant UK earnings chargeable to income tax and are under age 75.

Will I receive tax relief on my contributions?

Contributions paid to your InvestEngine Pension Plan are treated as being paid net of basic rate income tax. Once received we will make a claim to HMRC to have the basic rate of income tax that you paid on the net contribution paid to your InvestEngine Pension Plan. For example, if you want to pay a gross contribution of £10,000, you would pay a net contribution of £8,000 and HMRC would pay £2,000 to your pension.

You will need to claim any additional tax relief you may be entitled to in your self‑assessment tax return. There is no tax relief for such contributions on or after your 75th birthday.

Please note that it can take between 6 and 11 weeks for HMRC to send us your basic rate tax relief.

Is there a limit on the amount of tax relief that I can receive?

You will only get tax relief on your personal contributions in a tax year provided the total gross amount (this being the net amount that you paid in and the corresponding basic rate of income tax relief) does not exceed the greater of (i) £3,600 and (ii) the amount of your relevant UK earnings chargeable to tax for that tax year.

What is your annual allowance?

Your annual allowance is the limit on the amount of pension savings that can be made to all your pension schemes in a tax year before you have to pay tax on them. So, if the total gross amount of contributions in a tax year to the InvestEngine Pension Plan and any other registered pension schemes (including benefit increases in defined benefit schemes where relevant) exceed your available annual allowance, money purchase annual allowance or tapered annual allowance, whichever is/are applicable, you will be subject to a tax charge.

The annual allowance for the current, and previous three tax years are shown below.

Your annual allowance might be lower if you have flexibly accessed your pension pot or you a high income.

Flexibly accessing your pension pot means that you have received taxable income from a pension or purchased an annuity. If this is the case your annual allowance for the current, and previous three tax years are shown below.

If you are a high earner you can assess your tapered annual allowance (known as your tapered annual allowance) via this link.

Can I carry forward any unused annual allowances on my pension savings?

If you have used up all of your annual allowance or tapered annual allowance in a tax year, it may still be possible for further contributions to be made in that year provided you have unused annual allowance or tapered annual allowance available from one or more of the immediately preceding three tax years to carry forward to the tax year in question and you were a member of a registered pension scheme in each relevant year.

As mentioned earlier, full tax relief will only be available on contributions paid in a tax year by you provided your relevant UK earnings for that tax year are at least equal to the amount of those contributions. Carry forward is not available if the money purchase annual allowance applies.

How is the available annual allowance used up?

The annual allowance for the current tax year is used first.

The unused annual allowance from the previous tax years is then used, beginning with available unused annual allowance from the earliest tax year first.

Example 1

Frederick (aged 25) opened his InvestEngine Pension Plan in the 2024 – 25 tax year. This was his first pension account and he is not a high earner.

The annual allowance for 2025 – 26 is £60,000.

As Fredick was not a member of a registered pension scheme in any of the previous three tax years he doesn’t have the ability to carry forward unused annual allowance.

Example 2

Sally (aged 39) has been a member of a registered pension scheme for 10 years and she is not a high earner.

The annual allowance for 2025 – 26 is £60,000 and, as Sally has been a member of registered pension scheme, she can carry forward available unused annual allowance from the previous three tax years.

In the previous three tax years her pension input amounts were:

2024 – 25 – £15,000 (annual allowance for this tax year was £60,000)

2023 – 24 – £12,000 (annual allowance for this tax year was £60,000)

2022 – 23 – £10,000 (annual allowance for this tax year was £40,000)

Sally has unused annual allowance from those three tax years of:

2024 – 25 – £45,000 (annual allowance for this tax year was £60,000)

2023 – 24 – £48,000 (annual allowance for this tax year was £60,000)

2022 – 23 – £30,000 (annual allowance for this tax year was £40,000)

This means Sally has £123,000 unused annual allowance to carry forward to 2025 – 26, as well as the annual allowance for the 2025 – 26 (£60,000).

Please note though that relief is permitted provided the total gross amount does not exceed the greater of (i) £3,600 and (ii) the amount of your relevant UK earnings chargeable to tax for that tax year. So, in order for Sally to receive relief on gross contributions for current tax year of £183,000 she would need to have earnings in excess of this amount.

The InvestEngine Personal Pension operates under relief at source. This means that for every pension contribution we receive our pension provider claims tax relief from HM Revenue and Customs (HMRC) at the basic 20% rate. This process takes between six and eleven weeks but once the funds are received we add this directly to your InvestEngine Personal Pension.

For example, you pay us a contribution of £80 and we claim relief of £20 from HMRC (this being 20% of the gross contribution of £100).

If you are resident in England, Northern Ireland or Wales you can claim additional tax relief for money you put into relief at source pensions of:

• 20% up to the amount of any income you have paid 40% tax on
• 25% up to the amount of any income you have paid 45% tax on

If you are resident in Scotland you can claim additional tax relief for money you put into a private pension of:

• 1% up to the amount of any income you have paid 21% tax on
• 22% up to the amount of any income you have paid 42% tax on
• 25% up to the amount of any income you have paid 45% tax on
• 28% up to the amount of any income you have paid 48% tax on

If you already submit a Self Assessment tax return then you should claim the additional tax relief through this return. If you are using this process then there is no immediate need to submit any form of evidence. HMRC will receive reports from pension providers which will allow them to verify your claim. 

If you do not submit a Self Assessment tax return, then great news! We’ve partnered with Pie, the all in one tax app to help you reclaim what you’re owed. Using their award winning app, you can sign‑in, create your profile, and submit the claim for your additional rate of pension tax relief, all without contacting HMRC yourself ‑ Pie will do this for you! 

When making the application with HMRC Pie will act as your agent and submit the claim on your behalf, and just like InvestEngine, they’re free for DIY customers (but don’t worry, you can get some help for a small fee if you’d prefer some support).

Pie can also support you with all of your self assessment needs, so head over to InvestEngine, navigate to ‘Get additional tax relief’ in your Pension’s options menu, and let Pie help you get back what you’re owed. Plus, you can use our calculator here to see the impact adding this additional tax relief has on your retirement.

You can still do this yourself if you wish, so if you’re doing this without Pie’s help, you should register directly with HMRC. You will need to provide evidence of the contributions paid so to do this log into your InvestEngine account, select Reports then Create Reports and SIPP contribution statement.

Remember, the tax treatment of your investments is subject to personal circumstances which may change in future.

Clients must consider the access age of SIPPs, which currently is 55 years of age (rising to 57 in 2028), and also the flexibility of being able to access draw downs from their SIPPs. While a SIPP does offer flexibility, it is designed primarily for retirement savings, so early withdrawals may not be in your best interest, and there may be penalties or tax consequences for doing so.

Clients can seek advice from a financial advisor or tax professional to make sure they make the best decision regarding their SIPP.

InvestEngine does not offer tax or Investment advisory services. All clients are reminded to do their own due diligence or seek financial advice before making any investments with us.