SIPP Calculator

A Self-Invested Personal Pension (SIPP) is a UK personal pension that gives you full control over your investments. Unlike a workplace pension with a limited fund menu, a SIPP lets you invest in individual stocks, ETFs, bonds, funds, and even commercial property (through specific structures). You choose what to hold and manage it yourself.

The tax treatment is the same as any UK registered pension: contributions receive government tax relief at your marginal rate (20%, 40%, or 45%), growth is tax-free, and 25% of the pot can be taken as a tax-free lump sum at age 55+ (rising to 57 in 2028). The remaining 75% is taxed as income when withdrawn.

The main appeal of a SIPP over a workplace pension is investment choice. If your employer's plan only offers 20 funds with 0.75% fees, a SIPP opens up 10,000+ options from as low as 0.10–0.25% fees. Over 30 years, that fee difference compounds to a substantial wealth gap.

The UK pension tax relief system is one of the most generous in the world. When you contribute £100 to a SIPP, HMRC adds £25 immediately (20% basic rate relief) — your £100 becomes £125 in the pension. But higher-rate taxpayers can claim an additional 20% via Self Assessment, making their effective contribution £150 for £100 of gross pay.

Additional rate (45%) taxpayers get even more: their £100 becomes £175 after all relief is claimed. That's a 75% instant return on the money you put in — the equivalent of the government contributing 75p for every £1 you save.

The 2026 annual allowance is £60,000 (or 100% of earnings, whichever is lower). This covers your contributions plus employer contributions plus tax relief. For high earners with adjusted income above £260,000, the allowance tapers down to £10,000 — a rule that catches many senior professionals.

For UK taxpayers, the SIPP vs ISA decision is a common source of confusion. The key distinction: SIPPs give upfront tax relief (20–45%) but lock money until 55+ and tax withdrawals as income. ISAs give no upfront relief but offer complete flexibility with zero withdrawal tax.

For basic-rate taxpayers, the choice is roughly neutral — the ISA's flexibility often tips the scales. For higher-rate and additional-rate taxpayers, the SIPP's 40–45% upfront relief is powerful. The optimal strategy for most people: (1) Capture the employer match in the workplace pension, (2) Max the £20,000 ISA allowance, (3) Add more to the SIPP for the extra tax relief.

The blend of SIPP + ISA also gives you tax diversification in retirement. You can draw from the ISA for lumpy expenses without triggering income tax, and draw from the SIPP up to the personal allowance (£12,570) each year tax-free. This 'tax-efficient withdrawal sequencing' can save £10,000s over a retirement.