Personal pension and SIPP providers

A personal pension is a pension you arrange yourself, rather than one an employer sets up for you. You choose the provider, you decide how much to pay in, and the money is invested to build a pot for later life. Personal pensions, including stakeholder pension schemes, are provided by insurance companies, banks and building societies¹, and they are available from banks, building societies and life insurance companies². Citizens Advice adds that they are often arranged through banks and building societies, and sometimes through your workplace³.

Within the personal pension family there are three main types: the standard personal pension, the stakeholder pension and the self-invested personal pension, usually called a SIPP. All three are ways of saving into a pot whose value depends on the contributions paid in and how the investments perform, and all three are types of private pension, which come as either defined contribution or defined benefit arrangements⁴. The differences between them are mostly about who chooses the investments, what the charges are and how much control you have.

The rule most people want to know first is when the money can be taken. You can currently take a private pension, including some workplace pensions, from age 55, increasing to age 57 from April 2028⁵. That rise is fixed to a date, not to a birth year, so it affects anyone who will still be under 57 when it arrives.

Personal pensions, SIPPs and stakeholder pensions: the three main types

A personal pension is one that you arrange yourself. You choose the provider and decide how your contributions will be paid, and you might do this through an independent financial adviser⁸. The provider invests the money, usually in a range of funds it offers, and the pot grows or shrinks with those investments. Because it is your own arrangement rather than an employer's, it can travel with you between jobs, and the self-employed can open one in exactly the same way as anyone else.

A stakeholder pension is a flexible personal pension⁹. It is a money purchase pension provided by a bank, building society or insurance company, and trade unions may also offer them to members¹⁰. Stakeholder pensions are personal pensions that must meet government standards to make sure there is flexibility and to keep costs down¹⁰: MoneyHelper summarises those standards as capped charges, lower minimum payments, fee-free transfers and usually a range of investment funds⁶. That makes them the most standardised of the three types, and the one with the least room for surprise charges.

A SIPP, or self-invested personal pension, is a type of defined contribution pension¹¹. The name describes what makes it different: SIPPs allow you to hold multiple investments and products, so you can manage your pension fund yourself and have more control over it¹². Where a standard personal pension typically offers a menu of the provider's own funds, a SIPP opens the door to a much wider choice, which suits people who want to make their own investment decisions and are comfortable doing so.

There is also a workplace version of the personal pension. Group personal pensions are set up by an employer with a pension provider to provide each employee with a pension¹³. The scheme itself is still a personal pension, with the employee's own pot and the provider's own funds, but the employer chooses the provider and typically pays in alongside the employee. Our guide to workplace pensions explains how these differ from trust-based workplace schemes.

SIPP or personal pension: how each one works

The practical difference between a SIPP and a standard personal pension is who holds the steering wheel. With a standard personal pension, the provider offers a selection of its own funds and you choose from that menu, or leave the choice to a default arrangement. With a SIPP, you can hold multiple investments and products and manage the pension fund yourself¹². A SIPP is still a defined contribution pension at heart¹¹: the money paid in, plus tax relief, plus investment growth, is what there is to live on.

That extra control cuts both ways. A wider investment choice means more scope to tailor the pension to your own plans, but it also means the responsibility for poor choices sits with you. The Financial Ombudsman Service has noted that some SIPP operators have included unregulated collective investment schemes in their products, which are higher-risk investments that are not regulated by the FCA¹⁴. Anyone considering a SIPP for its wider investment range needs to be clear about what they are buying and who regulates it.

Stakeholder pensions sit at the simplest end of the range. Because they must meet government standards, they offer capped charges, lower minimum payments, fee-free transfers and usually a range of funds⁶. A stakeholder pension can suit someone who wants a low-cost, no-surprises arrangement without making investment decisions themselves; a SIPP tends to suit someone who wants to choose their own investments. Our comparison page on SIPP or standard personal plans sets the two side by side in more detail.

One rule applies across all three types. Under the "stronger nudge" rules, providers of personal and stakeholder pension schemes, including operators of SIPPs, must offer guidance when you want to transfer or access your pot¹⁵. That means before you move or take money, the provider should point you to free guidance on your options, most often the Pension Wise service, which our page on free guidance explains.

Moving an existing pension to a personal pension or SIPP

A pension transfer means moving money from one personal pension to another, or from a personal or workplace pension to a SIPP, a small self-administered scheme or a QROPS¹⁶. People transfer for all sorts of reasons: to bring several old pots together in one place, to get to a wider investment range, or to cut charges. The destination is always another pension, and the money stays inside the pension rules, so it cannot be taken out as cash as part of the move.

Transfers are not always straightforward, and the risks depend on what you are transferring from and to. Moving a defined contribution pot between providers is generally an administrative exercise, though charges and investment options can differ. Moving out of a defined benefit or final salary pension is a much bigger decision, because it means giving up a guaranteed income for a pot whose value depends on investments. Our pages on transferring between providers and final salary transfers cover the mechanics and the risks.

When you can take money out: 55 now, 57 from April 2028

The earliest age you can take a personal pension is usually 55, depending on your arrangements with the pension provider⁹. The same rule applies to stakeholder pensions: the earliest age you can take your personal or stakeholder pension is usually 55¹⁸, and with private pensions generally, the earliest you can start taking money is when you turn 55¹⁹. You cannot take money from your pension until you are at least 55, but you can do so at any point after that²⁰.

That age is rising. You can currently take a private pension, including some workplace pensions, from age 55, increasing to age 57 from April 2028⁵. Which? gives the same figure: the earliest age you can access money in a private pension is 55, rising to 57 from 2028²¹, and the access age is rising to 57 in 2028¹⁷. MoneyHelper states the position for personal pensions plainly: the earliest you can take your pension is usually age 55, or 57 from April 2028, unless you need to retire early due to poor health⁶.

The change happens on a single date, 6 April 2028, rather than being phased by birth year. That means it matters exactly when your 57th birthday falls. Someone who is 56 in March 2028 and turns 57 before 6 April 2028 keeps the current position; someone who turns 57 later that month or afterwards will generally wait. Some older pensions may have a protected pension age written into their rules, giving a right to take money at 55 beyond the change, so the only way to be sure for a particular pot is to ask the provider.

The exception to the minimum age is ill health. MoneyHelper notes that the usual age 55, or 57 from April 2028, applies "unless you need to retire early due to poor health"⁶. Schemes handle this differently, and some allow access earlier if you cannot work, which our page on taking your pension early because of ill health explains. Taking money early is also a common hook for scams, with offers to release your pension before the minimum age being one of the recognised warning signs¹⁷.

Why 57, and how it links to the State Pension age

The rise to 57 is not arbitrary. The age at which you can access money in private pensions will rise from 55 to 57 in 2028, so that it will remain ten years before you are eligible for the State Pension²³. The State Pension is not paid until you turn 66, now rising to 67²³. Keeping the private pension access age ten years below the State Pension age is the principle behind the change.

The State Pension age itself is moving. Between April 2026 and March 2028, the State Pension age is rising from 66 to 67⁷. Official statistics for Scotland record that in the latest data period, the State Pension age for both men and women increased to 66 years²⁴, and Parliament's Work and Pensions Committee notes the age is already being gradually increased and will reach 67 by April 2028²⁵. The Government is phasing in the increase from 66 to 67 from April, to be complete within two years²⁶.

Further ahead, current law allows for the State Pension age to increase from 67 to 68 between 2044 and 2046, though this timetable has not been confirmed²⁷. If that goes ahead, the ten-year gap would put the private pension access age at 58 for later generations, though no such change has been made.

The two ages are separate rules, and one does not automatically follow the other for an individual. The changes to State Pension age are unlikely to affect when people can take their workplace or personal pensions, because that age is usually set by the employer or pension provider²⁸. The State Pension has its own rules on how it is paid and increased: for example, the Additional State Pension, part of the old State Pension for those who reached pension age before 6 April 2016, increases in line with CPI rather than the triple lock⁵. Our pages on what is my State Pension age and the new State Pension cover those rules.

Planning a retirement date around the higher access age

If you intend to retire before 57, the change needs to be built into the plan. Your private or workplace pension scheme may have an earlier age where you can start receiving your pension, usually 55²⁹, but from April 2028 that usual minimum becomes 57⁵. Someone planning to stop work at 55 or 56 after the change will need another source of income for the gap, or will need to revisit the date.

The gap between leaving work and reaching the access age is a recognised problem. Parliament's Work and Pensions Committee has launched an inquiry into support for people facing a gap in income before pension age²⁶, and has reported on a benefit boost for 66-year-olds amid the State Pension age rise²⁵. The practical options for bridging the years include continuing to work, using savings, or deferring the retirement date. Which? notes that the State Pension age is rising to 67 and the private pension access age to 57 in 2028²³, so for many people the private pension arrives well before the State Pension, and the plan has to cover the years in between.

Taking a pension early also has a cost beyond waiting. The State Pension age is increasing³⁰, and taking your private pension early means the pot has less time to grow and has to stretch over more years of retirement. nidirect's guidance on early retirement sets out the effect on your pension of drawing it before your target date³⁰. Our page on how much you need to retire helps with working out whether a given date is realistic.

Drawing an income from a personal pension or SIPP

Once you reach the minimum age, there are several ways to turn the pot into money, and you can do so at any point after that age²⁰. The main options are taking a tax-free lump sum, keeping the pot invested and drawing an income from it, buying an annuity, or taking the whole pot in one go, with tax applying to most of what is drawn. Our page on your options for taking money sets these out in full, and pension drawdown and annuities have their own guides.

Tax is collected at source. The tax on private or occupational pensions is deducted by your pension provider and paid to HMRC³¹. How much tax you pay depends on your other income in the year, and withdrawals above the tax-free element are added to your income for the year, which can push part of a withdrawal into a higher band. Our pages on how pension income is taxed and emergency tax on withdrawals explain the mechanics.

Inside the pension, investments grow free of some taxes that apply outside. Dividends received within a SIPP or by registered pension schemes are not subject to the usual dividend tax rules³². That is one reason a pension can be a tax-efficient wrapper for long-term saving, though the tax treatment of money taken out is what matters most at the point of drawing.

Before you take money, the stronger nudge rules apply: providers of personal and stakeholder pension schemes, including SIPP operators, must offer guidance when you want to transfer or access your pot¹⁵. Pension Wise provides free guidance on the options, and taking it before making irreversible choices, such as buying an annuity or drawing the whole pot, is what the rule is designed to encourage.

Who provides personal pensions and SIPPs in the UK

Personal pensions, including stakeholder pension schemes, are provided by insurance companies, banks and building societies¹. Citizens Advice describes the same market: personal pensions are provided by insurance companies, often through banks and building societies, and sometimes through your workplace³. nidirect confirms they are available from banks, building societies and life insurance companies².

Stakeholder pensions come from the same kinds of firms: a bank, building society or insurance company, with trade unions also able to offer them to members¹⁰. SIPP operators are regulated by the Financial Conduct Authority, and the FCA has noted that some SIPP providers may include unregulated collective investment schemes in their products¹⁴, which is worth knowing when comparing operators.

In practice, the market splits into a few kinds of provider. Insurance companies and life insurers, many of them household names, offer standard personal pensions and stakeholder pensions, often with their own fund ranges. Banks and building societies offer personal pensions, sometimes arranged through their investment arms. Investment platforms and specialist SIPP operators offer SIPPs, where the selling point is the wider investment choice and the ability to manage the fund yourself¹². Our directory of pension and investment providers lists the firms in this market, and our guide to pension providers, platforms and fund managers explains what each kind does.

Complaints and where protection stops

If something goes wrong with a personal pension or SIPP, there are two ombudsman services, and which one handles the complaint depends on what it is about. The Pensions Ombudsman looks at a wide range of arrangements, including personal pension plans, SIPPs, stakeholder pension schemes, annuities and section 32 buy-out policies³³. Its own guidance lists the same coverage: workplace, employer and stakeholder pension schemes, small self-administered schemes, SIPPs, annuities and personal pension plans³⁴.

The Financial Ombudsman Service handles complaints about how a firm sold or administered a product, including personal pensions⁸ and transfers from personal pension arrangements¹⁶. Complaints about mis-selling of a financial product, including a pension, follow the ombudsman's process, and Which? sets out what a consumer can do if they think they have been mis-sold¹². Start by complaining to the provider, and escalate to the relevant ombudsman if the firm's answer is not satisfactory.

Complaints about SIPPs have been a significant part of the ombudsman's workload. In its complaints data for 2020/21, the Financial Ombudsman Service recorded its highest uphold rate for self-invested personal pensions, at 56%³⁵. That reflects the risks around wider investment choice: where a SIPP has been used to hold unsuitable or unregulated investments, complaints have often succeeded. The FCA's guidance on unregulated collective investment schemes notes that some SIPP operators have included them in their products¹⁴, and our page on complaining about a pension provider explains the process step by step.