Self Invested Pensions – what are they and are they for you?


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Most money currently going into SIPPs doesn't come from new contributions. Instead, people are using SIPPs to consolidate their old pensions, which could have been built up over time and spread over several companies. High charges and poor performance are the key reason for this. Consolidating pensions in this way allows you to see all your pension investments in one place, making it easier to see how they're doing and what size pension you might get.

So what's the catch? On one side there are concerns that many people are not using SIPPs to their full effect, and only investing in the investment funds controlled by their pension provider. In this case, people are paying for something they are not using, as a straightforward personal pension would suffice and this may have lower charges. At the other extreme, there are concerns that many people will pile all their retirement funds into a series of high-risk investments and lose the lot. Both of these are valid concerns and you should take advice before taking the plunge. Get advice