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I’m considering setting up an additional DIY SIPP pension. Do you see an issues with this?

07 July 2021

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Question by Mike

I’m 57 and now not working but living off savings while I renovate my house. I will receive a reasonable final salary pension when I’m 60. I’m considering setting up an additional diy SIPP pension and paying in £2880 per year to benefit from the gov top-up of £720 to £3600. Apart from the chance of the funds invested in going down, I can’t see a downside to this investment - can anyone else? Thanks


Answered by Rachel Efetha

Hi Mike

Thanks for your question. I agree, there is no downside other than potential investment risk, although the tax relief does cushion you a bit so hopefully you loose the taxman's money and not your own.

However, unless you are going to self select direct share investments, you do not need a SIPP. You'll just be paying higher charges for functionality that you're not using. A simple off the shelf pension with Royal London, Aviva or Aegon in a multi asset fund should be fine.

If you need any further information, please contact me or another adviser on the website.

Rachel Efetha

Answered by

Rachel Efetha

Chartered Financial Designer

Rachel has nearly 30 years’ experience in Financial Services, with the last 21 years advising clients. She advises on a holistic basis but particularly enjoys Cashflow Planning to see when her clients can afford to retire, and has reduced grown men to tears twice by telling them they could afford to resign right now. As a divorcee herself, Rachel loves coaching women going through divorce to take financial control, and has successfully argued with solicitors to gain her clients a much bigger slice of the pension pie.