A Self-Invested Personal Pension (SIPP) is a UK pension wrapper that gives the saver direct control over the underlying investments. For employees with a stable workplace scheme, the standard arrangement is usually adequate. For business owners, directors, and senior professionals — particularly those making large employer contributions or planning to hold commercial property in pension — a SIPP is often the better long-term home for retirement capital.
What a SIPP can hold
SIPPs accept a much wider range of investments than typical workplace schemes:
- UK and overseas listed shares
- Investment funds and ETFs
- Investment trusts
- Government and corporate bonds
- Cash and money market funds
- Commercial property (including the freehold of trading premises)
- Unquoted shares (subject to specific rules)
Residential property and most "tangible movable property" such as wine, art, or classic cars are not allowed — purchasing them through a SIPP triggers severe tax charges classed as "taxable property".
Commercial property in SIPP
One of the most powerful uses of a SIPP for an owner-managed business is purchasing the company's trading premises through the pension. The company pays market-rate rent to the SIPP, which becomes pension capital growing tax-free. The rent is deductible against Corporation Tax. On eventual sale, any gain inside the SIPP is exempt from Capital Gains Tax.
The structure works particularly well for professional services firms, manufacturing businesses with their own factories, and retail operators who own the freehold. The mechanics need careful set-up — borrowing within the SIPP is capped at 50% of net asset value, and the rent must be on commercial terms with arm's-length documentation. Our business advisory team coordinates these structures with the SIPP trustee and a regulated financial adviser.
SIPP charges
SIPPs generally cost more to run than workplace schemes. Expect annual platform fees of around 0.15%–0.45%, plus dealing costs, plus higher charges for any specialist holdings such as property. For a director with a £200,000+ pension fund, those charges are usually justified by the flexibility, investment choice, and tax planning capability. For a £20,000 fund of plain global trackers, a workplace scheme will be cheaper.
Tax relief mechanics
SIPP contributions made personally attract basic-rate tax relief at source — £80 contributed becomes £100 in the wrapper. Higher and additional rate taxpayers claim the extra relief through Self Assessment. Employer contributions to a SIPP go in gross with no further relief mechanic — the relief is given by deducting the contribution from company profits.
SIPP vs SSAS
A Small Self-Administered Scheme (SSAS) is a similar arrangement to a SIPP but established by a sponsoring employer with up to 11 members. SSASs can lend back to the sponsoring business (subject to strict rules) which SIPPs cannot. For most owner-managed businesses without complex group structures, a SIPP is simpler and cheaper. For groups with multiple directors and a desire to keep pension assets unified, a SSAS sometimes wins.
Choosing a SIPP provider
Mainstream platforms (Hargreaves Lansdown, AJ Bell, Interactive Investor, Fidelity) work well for listed investments. Full-SIPP providers such as Curtis Banks, Dentons, or Hartley Pensions specialise in property and unquoted holdings. The right choice depends on what you actually plan to hold — picking a low-cost platform that does not accept your commercial property is an expensive mistake.
How PushDigits supports SIPP planning
We do not give regulated investment advice — that requires a separately authorised firm — but we work alongside our clients' financial advisers to model the tax position, calculate annual allowance and carry forward, route employer contributions correctly through Corporation Tax, and report the position on the director's Self Assessment.
If you are a business owner and your pension is sitting in a default workplace scheme, you almost certainly have room to optimise. Book a SIPP planning call or reach the team via our contact page.