How-to Guides » Start a pension

Do it yourself!

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You don’t have to rely on a workplace or company to pick where your money should be invested. You can do it all yourself by using a Self Invested Personal Pension (SIPP).

A SIPP gives you much more freedom and flexibility when it comes to deciding how you want to invest your pension, and allows you to consolidate several different pension schemes into one plan.

You can then invest your money in a whole range of assets from investment funds (including unit trusts and OEICs) to individual shares to commercial property.

However, it’s worth remembering there are different types of SIPP to choose from.

Hybrid Sipp
A Hybrid SIPP is like a half-way house between a traditional personal pension scheme and a SIPP.

The most important thing you need to know about Hybrid SIPPs is you'll normally be expected to pay a fair chunk of money into the company's own investment funds before you'll be able to choose your own assets.

Full SIPP
Full SIPPs are usually run by specialist pension companies (although insurance company, Standard Life also offers one). As the name suggests, these plans offer access to a wide range of assets in addition to standard investment funds.

The assets which can be held within a full SIPP normally include:

• Investment trusts
• Single company shares
• AIM listed shares
• Unquoted shares
• Gilts/bonds
• Cash
• Overseas investments
• Traded endowments
• Derivatives (including futures and options)
• Commercial property

Typically, you'll be charged a fee to set the SIPP up as well as an annual administration charge. Putting shares in your SIPP will also incur dealing costs.

Low cost SIPP
There are plenty of these low cost schemes about including the Vantage SIPP from Hargreaves Lansdown and Sippdeal's e-sipp. You'll normally be able to invest in a far greater range of funds and other assets through a low cost SIPP than you would via a traditional personal pension.

You can easily run your plan online which allows you to keep track of performance and switch your investments around if you wish. So, what you get with a low cost SIPP is the opportunity to self-invest without paying sky high charges.