Can You Have More Than One SIPP?

If you’re a confident investor and want to have flexibility over how and when you invest in your pension pot, then a self-invested personal pension or SIPP could be a great way for you to plan for retirement.

You may be wondering though if it’s possible to have multiple SIPPs, whether you can hold a SIPP alongside a work pension, and how you might go about consolidating multiple pension pots. In this article we’ll explain everything you need to know about having more than one SIPP and discuss how an independent pensions advisor can help you make the right choices.

How many SIPPs can you have?

As many as you like! There isn’t a limit to the number of SIPPs someone can hold, although the more pension pots you have the harder it can be to administer them all. You can hold multiple SIPPs alongside other pensions as well as other savings and investments such as ISAs.

Can you have multiple accounts with different providers?

Yes, you don’t have to stick to one platform for your SIPPs, you can take out multiple SIPPs with any number of different providers. The key thing to remember is that your annual and lifetime pension allowances apply to the combination of all of your pension pots, rather than individually.

This means that if you’re managing multiple SIPPs and other pensions, you’ll need to make sure you’re balancing your overall contributions and not paying too much in, otherwise you could face hefty SIPP tax charges.

What are the annual and lifetime pension allowances?

You can contribute up to £40,000 across all of your pensions, or 100% of your annual income, whichever is lowest, in any one financial year. The lifetime SIPP allowance is currently £1.073 million, frozen until 2026.

It’s important to remember that this lifetime limit relates to your fund value rather than your contributions, so you need to allow for this in your pension planning.

Why would you open more than one?

Many people choose to open multiple SIPPs to get an even wider range of investment options. While it’s true that most SIPP providers will offer a very broad mix, with plenty of options for most investors, if you’re looking for very specific assets then you might prefer to shop around.

Holding more than one SIPP can also be a way to cut costs by tailoring each SIPP to particular investments depending on their fee structure. If you want to invest in both commercial property and stocks and shares for example, it might be that two separate SIPPs, each with terms that suit a particular type of asset better, could be more efficient.

There can also be benefits in spreading risk, not in terms of investment growth, but when it comes to providers. If you have one SIPP and your provider changes their terms, charges or choice of investments, your entire pension pot will be impacted. Spreading your pension between more than one SIPP platform can minimise this risk.

Things to consider

While there are certainly some advantages to having more than one SIPP, there can be disadvantages too that are worth considering. The main issue is managing your investments and allowances. Having things spread over multiple SIPPs can make saving more complicated, and it can be harder to keep track of your asset mix, contributions and each projected fund value, leaving you open to the risk of your portfolio becoming imbalanced, or going over your allowances and facing tax charges.

It’s also worth looking at the charges for each of your SIPPs, and making sure you’re not wasting a lot of money paying multiple platform fees. Many providers will charge a mix of flat fees and percentage charges, including regular admin, fund and share dealing fees, fund manager charges and sometimes more.

How a pensions advisor can help you maximise your SIPPs

Managing multiple SIPPs can be complex, even if you are an experienced investor. There’s a lot to consider, from varying fee structures through to getting the right mix of assets across more than one fund and making sure you don’t go over your allowance and incur tax charges.

An independent pensions advisor can help with all of this, making sure that you choose the SIPPs that are right for you and that make the most sense financially in terms of matching your goals and investment mix to a provider’s specialism and terms.

Can you consolidate your accounts?

Yes you can, although you should be cautious of simply scooping all of your existing pensions into one pot. Although there are definitely benefits to having everything in one place in terms of manageability, it may be that you lose out in the long run on particular benefits.

If you’re thinking about consolidating your pensions, whether it’s multiple SIPPs or other personal or workplace pensions, it’s always a good idea to get expert advice to make sure it’s the best decision for your circumstances.