Self-invested personal pensions (SIPPs)
Produced in partnership with Alistair Hill of CMS
Self-invested personal pensions (SIPPs)

The following Pensions guidance note Produced in partnership with Alistair Hill of CMS provides comprehensive and up to date legal information covering:

  • Self-invested personal pensions (SIPPs)
  • Legislative background
  • Establishing and registering a self-invested personal pension scheme
  • Governing documentation
  • Contributions and benefits
  • Investments—possibilities and restrictions
  • Taxable property
  • Due diligence for SIPP investments

FORTHCOMING DEVELOPMENT: Following the publication of a discussion paper (DP18/1)on the effectiveness of competition in non-workplace pensions (including self-invested personal pension schemes), the FCA published a feedback statement exploring some remedies to improve levels of competition. Proposed remedies include introducing a requirement for providers to offer investment pathways which provide ready-made investment solutions and making costs clearer and comparisons easier. The FCA intends to follow this up with a consultation paper in early 2020. See: FCA: Effective competition in non-workplace pensions: FS19/5.

When personal pensions were first introduced in April 1988, they could only be established by authorised banking, insurance or unit trust organisations.

There was a clear expectation that the personal pensions offered by these institutions would provide investment opportunities that broadly corresponded (and would be restricted) to their core business activities of banking, long-term insurance and the provision of unit trusts.

However, no such restrictions were set out in the legislation and HM Revenue & Customs (HMRC) issued a statement (Joint Office Memorandum 101) setting out the circumstances in which it would be willing to approve personal pension schemes that offered members wider investment choices.

Under current conditions, these so-called self-invested personal pension schemes (SIPPs) can allow a member to have almost complete autonomy in determining the investments that are to be