How many SIPPs can I have in the UK?

What is a SIPP?

A self-invested personal pension (SIPP) is a type of pension designed for those who like to have a say in where their money goes. 

Unlike traditional pension plans, where you invest in a pre-set portfolio, a SIPP gives you full control. You get to handpick your investments, whether stocks, funds, or even property.

It’s like having a blank canvas for your retirement portfolio; you decide what’s in it, from high-growth stocks to commercial real estate. 

If you want more flexibility and control over your retirement fund, a SIPP could be suitable, although it’s worth considering financial advice beforehand.

Can you have more than one SIPP?

If you’re wondering how many SIPPs you can have, the answer is simple: there is no legal restriction in the UK. You are free to open multiple SIPPs with different providers if you wish. 

But before signing up with multiple providers, keep in mind the annual pension contribution limit. For most people, this is capped at £60,000 or 100% of your earnings, whichever is lower. If you exceed that limit, you might end up paying extra in taxes. 

So, while there’s no limit to the number of SIPPs you can have, it’s wise to keep your contributions in check to avoid any unexpected tax surprises.

Why would someone want multiple SIPPs?

There are several reasons why having more than one SIPP might make sense.

Investment diversification

Not all SIPP providers offer the same investment options. Some may be better for stocks, others for bonds or even niche assets.

By spreading your investments across different SIPPs, you get access to a broader range of options, meaning you can diversify in a way that suits your goals. 

Having multiple SIPPs helps you diversify your investments by reducing your exposure to any single market or asset type.

Fee management

Each SIPP provider charges its own fees, and by choosing carefully, you may be able to cut costs.

For instance, if one provider has low fees for holding shares, that’s where you might keep your stocks, while another SIPP with lower fees for funds could hold your mutual funds or ETFs. 

Managing fees like this can add up over time. 

Risk management

Having multiple SIPPs allows you to spread your risk across different providers.

While your SIPP may be protected by the Financial Services Compensation Scheme (FSCS), this is only up to £85,000.

It’s a simple way to add security to your retirement plan without too much extra effort.

Provider benefits

Some SIPP providers may offer unique perks such as a user-friendly platform, strong customer support or exclusive investment options.

By having multiple SIPPs, you can enjoy the best features each provider offers and build your ideal retirement fund. 

What are the potential drawbacks of multiple SIPPs?

While there are clear benefits to having more than one SIPP, there are also a few potential pitfalls to remember.

Complexity

The more SIPPs you have, the more admin work there is to keep on top of as each account needs monitoring.

It can get a bit much, especially if you’re not a fan of spreadsheets and statements or don’t have a financial adviser who can help. 

Managing multiple SIPPs means staying organised and dedicating time to ensure everything runs smoothly.

Multiple fees

While multiple SIPPs can save on some fees, they can also rack up costs if you’re not careful.

Each SIPP comes with its own fees, from annual management fees to trading charges.

If you’re not careful, you could pay more in fees across multiple accounts than if you kept everything in one.

Management and overlap

With more SIPPs comes more juggling. It’s easy to end up with overlapping investments across accounts, which could limit the diversification of your assets.

To get the most out of each SIPP, you’ll need to carefully track what’s held where and monitor your overall asset allocation.

How can I manage multiple SIPPs effectively?

If you’re considering managing multiple SIPPs, here are some tips to make it easier and keep your retirement on track.

Regular reviews

At least once a year, review each SIPP, assess its performance, and see if you’re on track with your retirement goals.

This is also a good time to check fees and make necessary adjustments. Regular reviews help you stay in control and spot opportunities for improvement. 

Digital tools

You can use a spreadsheet or investment management software to keep tabs on everything in one place.

These tools help you monitor performance, check fees, and ensure your portfolio remains balanced and diversified. Plus, many of these tools offer features such as charts and reports, making it easier to visualise where you stand.

Consider professional advice

A financial adviser can help you avoid common pitfalls such as overlapping investments or inefficient asset allocation.

They can also provide tailored advice on how best to structure your SIPPs for maximum benefit, ensuring your retirement plans align with your goals and risk tolerance.

Get expert financial advice

Having multiple SIPPs may give you the best of all worlds, from access to a broader range of investments to potentially lower fees and the flexibility to spread risk. But with this added freedom comes extra management. 

By staying organised, using digital tools, and seeking professional advice, you can make multiple SIPPs work together to support your ideal retirement plan.

Let Unbiased match you with a professional financial adviser to help you organise and optimise your multiple SIPPs for a more secure retirement plan.