Self-invested personal pensions, or SIPPs, can be a good option for those looking for pension flexibility, choice and control. For some people, splitting their pension funds across more than one SIPP can seem an appealing way to boost those benefits. But doing so can also add complexity and, potentially, cost to the task of managing your pensions. Read on to find out more about the advantages and disadvantages of opening more than one SIPP.
What is a SIPP?
A self-invested personal pension (SIPP) is a type of private pension. Like all private, or personal, pensions, SIPPs are defined contribution (DC) pensions. This means that the money you pay into your pension is invested, and the value of your pension pot when you retire will depend on investment performance.
Unlike standard personal pensions, where the pension provider manages the investments on your behalf, with a SIPP you are in control of exactly how your pension funds are invested. This means they tend to be better for those with experience in investing. SIPPs tend to offer a wider range of investment options than regular pensions, though SIPP pension charges are typically higher as a result. You can find out more about the pros and cons of SIPPs in our full guide to self-invested personal pensions.
Is it possible to have more than one SIPP?
Yes. Just as it’s fine to have both a personal pension (such as a SIPP) and a workplace pension at the same time, you can also hold multiple SIPPs at the same time.
Is there a maximum number of SIPPs I can have?
In theory, you can have as many personal pensions – including SIPPs – as you want. There’s no legal limit. However, while there can be benefits for some in having more than one SIPP, we wouldn’t recommend opening too many. Doing so can make it harder to keep track of and manage your pension pots.
Can I pay into multiple SIPPs at the same time?
Yes. For example, if you have a certain amount you want to contribute towards your pension each month, you can choose to split this between 2 or more SIPPs.
However, bear in mind that there’s a limit to how much you can pay in each year across all of your pension pots and still benefit from tax relief. So, you’ll need to keep an eye on this to avoid exceeding your allowance.
What are the benefits of having more than one SIPP?
There are a few potential benefits of investing into more than one SIPP. How valuable these benefits are to you will depend on your personal circumstances. Benefits may include the following:
Access to a wider range of investment options. In general, SIPPs tend to have a wider range of investment options than standard personal pensions. These can include more sophisticated investments, such as individual stocks and shares, or even commercial property and off-shore funds. But not every investment will be available from a single provider. Having more than one SIPP will increase the range of investment choices available.
You can choose the cheapest provider for each type of investment. For example, one provider might be cheaper for shares and another might be cheaper for funds. If you want to invest in different types of investments, you may be able to save money by choosing the cheapest provider for each type. You’ll need to offset this against any additional costs incurred by holding multiple accounts in the first place, though. This might be important if fees are fixed rather than being charged as a percentage of your pot.
Holding your money across more than one SIPP spreads the risk in case of problems with the provider. If a SIPP operator fails, the Financial Services Compensation Scheme (FSCS) may be able to offer compensation up to a maximum of £85,000 per person per firm. So if you hold more than £85,000 in a SIPP, it could be worth splitting it across multiple providers.
Are there any downsides to having more than one SIPP?
Running multiple SIPP accounts in parallel can have some disadvantages too. These include the following:
It could cost you more in certain charges. As mentioned above, if annual management charges are fixed rather than a percentage of your pot, this could effectively double (or more) these fees. It’s also worth bearing in mind that some providers charge tiered platform fees, depending on how much you have invested. For example, you might pay 0.5% on the value of your pot up to £100,000, and 0.25% on amounts above this. Splitting your pension into multiple smaller pots could mean you miss out on any preferential rates for higher levels of saving.
It involves more time and effort. The administrative burden of managing several investment accounts will inevitably be higher than looking after just one. It’ll also be trickier to get a clear overview of your funds.
You’ll need to pay closer attention to allowances. The amount you can pay into a pension each year and benefit from tax relief is capped. There’s also a lifetime allowance on how much your combined pension pots can be worth when you retire without incurring a tax charge. If you’re paying into multiple pension accounts, you’ll need to keep a close eye on these limits to make sure the total amount you pay in doesn’t tip you over the limit.
How do I open more than one SIPP?
The process for opening a second (or third or fourth) SIPP works in the same way as the first SIPP you open. You can find out more about different types of SIPPs, who offers them and how to open a SIPP in our full SIPP comparison guide.
If you’re tempted by the potential benefits of opening more than one SIPP but aren’t sure whether it’s worth it, it’s sensible to seek advice from a regulated financial adviser. They’ll be able to work through the pros and cons and make recommendations based on your specific circumstances.
If I have multiple SIPPs, how much can I pay into each one?
There are no restrictions on how much you can pay into each SIPP you hold. In fact, you can pay as much into any personal pension as you want, regardless of how many you hold.
However, there is a limit on the total amount you can contribute towards your pension each year that qualifies for tax relief. For the 2021-22 tax year, the annual allowance across all your pension pots is a maximum of £60,000 (or 100% of your annual earnings if this is lower). You can pay in more than this, but it won’t benefit from tax relief.
How does tax relief work if I have more than one SIPP?
When you pay money into a pension scheme, your contributions usually benefit from tax relief. This applies whether you’re paying into a workplace pension, a standard personal pension or a SIPP.
With SIPPs, you’ll typically receive basic-rate (20%) income tax relief at source. This means that the tax you would have paid on each contribution is added to your pension pot. If you are a higher-rate (40% or 45%) taxpayer, you can claim the extra via your tax return or by applying directly for a tax refund.
Importantly, though, you only qualify for tax relief pension contributions up to a certain annual cap. For the 2021-22 tax year (and remaining at this level for the 2022-23 tax year), the total allowance is a maximum of £60,000 each year for most people. This is the total amount you can contribute across all of the pension schemes you pay into. However, you can also only receive tax relief on up to 100% of your annual earnings. So, if you earn less than £60,000, your annual allowance will be lower.
This allowance can be split up however you like. So, assuming you qualify for the full £40,000 allowance, you could pay £25,000 into one SIPP, and £15,000 into a second SIPP, for example, and benefit from tax relief on your full contributions into both schemes. This assumes you don’t have any separate personal or workplace pensions that you’re actively paying into.
But if you pay in more than the £60,000 total allowance, any extra won’t qualify for tax relief. If you are paying into multiple accounts, individual providers won’t necessarily know when you tip over your allowance in order to stop applying tax relief. You’ll therefore need to monitor this carefully yourself. If you do exceed your allowance, either you or your pension provider(s) must pay an annual allowance tax charge. You can find out more about this on the gov.uk website.
Can I consolidate multiple SIPPs into a single account if I want to?
Whatever your reasons for having more than one SIPP in the first place, if you later decide that this approach isn’t right for you, you can consolidate your pension funds into a single scheme.
Before you take this step, make sure you check for any exit penalties on the schemes you’ll be closing. Assess whether the pros of switching outweigh the cons.
Bottom line
SIPPs are designed for more experienced investors that want to take control of how their pension funds are managed. Having more than one SIPP takes this to the next level, opening up yet more investment choices and, potentially, allowing you to choose the cheapest SIPP provider for different types of investment. But having multiple pension accounts will inevitably take more administrative time and effort. You’ll also need to keep more careful track of your pension allowances.
Frequently asked questions
Yes, you can transfer either some or all of the funds in one SIPP into another SIPP. This can be either a new scheme or an existing one. You’ll need to check whether there are any fees for doing so. And make sure that the SIPP you’re moving funds into accepts transfers. Most do, but a handful might have restrictions.
Technically, there’s no limit on how much you can put into each SIPP you hold. However, there is a limit on how much you can pay in each year and benefit from tax relief – one of the main benefits of paying into a pension. There’s also a limit on how much you can hold in total across all your pensions when you come to retire, without incurring a tax fee. These limits are known respectively as the annual allowance and the lifetime allowance.
As of the 2024/2025 tax year the annual pension allowance for most people is £60,000 or the level of your annual earnings if this is lower. This is the maximum amount you can pay in across all your pensions, including SIPPs, and receive tax relief.
The pension lifetime allowance is the maximum you can build up in your pension before being hit with extra tax charges. This includes SIPPs, standard personal pensions and workplace pensions. The pension lifetime allowance is currently £0. It’s frozen at this level until at least 2026.
No. The tax breaks offered by saving into a pension apply across all of your pension schemes, rather than per pension scheme. The benefits you get will be the same whether you pay the same amount into a single pension scheme or split it across multiple schemes.
Yes. It’s entirely legal to have more than one SIPP. Whether it’s worth doing so in practice will depend on your circumstances and what you want to invest in as well as the charging structures of the SIPPs in question.
Ceri Stanaway is a researcher, writer and editor with more than 15 years’ experience, including a long stint at independent publisher Which?. She’s helped people find the best products and services, and avoid the pitfalls, across topics ranging from broadband to insurance. Outside of work, you can often find her sampling the fares in local cafes.
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