Self-invested personal pensions
Self-invested personal pensions (SIPPs) are a type of personal pension. They are an individual contract between you and the pension provider. However, SIPPs offer much wider investment powers than are generally available for personal pensions and group personal pensions.
The wider investment powers can allow you to invest in a wide range of assets, including:
- quoted UK and overseas stocks and shares
- unlisted shares
- collective investments (such as OEICs and unit trusts)
- investment trusts
- property and land (but not most residential property) insurance bonds.
A SIPP can also borrow money to purchase some investments. For example, a SIPP can raise a mortgage to part-fund the purchase of a property. Such properties would normally then be rented out and the rental income, received by the SIPP, can be used towards servicing the mortgage repayments and the costs of running the property.
Not all SIPPs allow you to invest in the full range of allowable investments. SIPPs that hold specialist investments (such as property) may be liable to pay higher charges than schemes that hold ‘mainstream’ investments.