What are SIPP rates and charges?

Why do SIPP charges matter for your retirement savings?

Pension charges might seem small when you consider them on a yearly basis, but over the course of 20, 30, or 40 years these costs can compound significantly, eating into the investment returns that could otherwise be growing your retirement wealth.

How do fees affect your long-term pension growth?

Small percentage differences in annual charges can have a surprisingly large impact on your final pension pot through the effect of compound costs over time.

Example of the impact of different fees over 30 years:

Consider two investors, each starting with a £50,000 SIPP and contributing £5,000 a year for 30 years, both achieving 5% annual investment returns before fees:

• Investor A (0.5% total annual charges): After 30 years, their pension pot grows to approximately £356,000.
• Investor B (1.5% total annual charges): After 30 years, their pension pot grows to approximately £286,000.

The 1% annual fee difference costs Investor B £70,000 over 30 years, representing nearly 20% of their potential pension wealth. That's a substantial amount of money that could have provided additional retirement income for years.

And the longer your investment timeframe, the more dramatic this effect becomes. Someone starting a SIPP at age 30 with 37 years until retirement faces an even larger cumulative impact from higher pension fees than someone starting at 50.

This is why choosing the right SIPP provider (with competitive SIPP  charges), often has a bigger impact than trying to choose the best investments or select the best-performing funds.

What does the FCA say about transparency on SIPP costs?

Financial regulators like the FCA recognise that complex charging structures can make it difficult for consumers to understand what they're actually paying, which is why they've introduced rules requiring greater transparency.

FCA requirements on fee disclosures:

The Financial Conduct Authority requires SIPP providers to disclose all charges clearly before you invest, including platform fees, fund charges, retained interest charges, and transaction costs. Providers must show you illustrations of how charges would affect your pension over time, helping you understand the long-term impact.

What types of fees and charges apply to a SIPP?

SIPPs involve multiple types of charges, each covering different aspects of the pension’s administration, investment management, and transactions.

Do you pay to open a SIPP?

Most modern SIPP providers no longer charge setup or opening fees, although some specialist providers offering complex investments like commercial property might charge initial fees.

Common approaches to setup fees:

• No setup fee: The majority of platform SIPPs now charge nothing to open your account, making it easy to get started without upfront costs. This has become the industry standard as providers compete for customers.
• Fixed setup fees: Some ‘full SIPP’ providers charge £100 to £500 for account opening, reflecting the additional complexity of administering specialist investments.
• Transfer setup fees: A few providers charge for accepting pension transfers into your SIPP, although this is increasingly rare and generally indicates you should look elsewhere.

If a provider charges sizable setup fees, you should ensure that the benefits (such as access to specific investments or superior service) really do justify these added costs. You can often find equivalent or better services elsewhere without  paying those opening fees.

What is a platform or annual administration fee?

The platform fee (also called the administration fee or account fee) is the main ongoing charge for holding your SIPP. This fee covers the provider's costs for administering your pension, maintaining records, producing statements, and providing online access.

These platform fees can be structured in several different ways:

• Percentage-based fees: Charged as a percentage of your pension pot value, these fees often range between 0.10% and 0.45% annually for platform SIPPs. For example, 0.25% on a £100,000 SIPP equals £250 per year.
• Capped fees: Some providers combine percentage fees with maximum caps, such as 0.35% annually capped at £500, protecting people with larger pensions from excessive charges.
• Fixed annual fees: Some providers charge flat fees regardless of pot size, ranging from £100 to £300 annually. These can be cost-effective for larger pensions but may be more expensive for small pots.
• Tiered fees: Some providers use sliding scales, where the percentage decreases as your pot grows. For example, 0.35% on the first £250,000, then 0.25% on amounts above that.
• Fee-free models: A few discount platforms charge no platform fee, instead earning revenue entirely from dealing charges.

Platform fees are deducted automatically from your SIPP, either monthly or quarterly, so you don't need to pay them separately.

What are dealing or trading fees?

Every time you buy or sell an investment within your SIPP, you'll usually pay a dealing fee (also called a trading fee or transaction charge).

These can vary quite a bit depending on the type of investment, but some examples might be:

• Online share trades: £5 to £12 per trade for UK shares, with international shares sometimes costing slightly more.
• Fund purchases: £0 to £1.50 per fund trade, with many providers offering free fund dealing to encourage long-term investment.
• ETF trades: Charged the same as share trades, possibly £5 to £12 per transaction.
• Bond trades: Often more expensive than share trades, sometimes £15 to £25 per transaction, reflecting the specialist nature of bond trading.
• Regular investment dealing: Many providers offer free or reduced-cost dealing for regular monthly purchases, encouraging consistent investing.

Dealing charges can accumulate quickly if you trade frequently. Making 20 trades a year at £7.50 each costs £150 annually, which can really erode your returns over time, particularly for smaller pensions. This is one reason why overtrading can undermine pension performance.

What is a fund management or custody charge?

In addition to platform charges, investment funds held within your SIPP charge their own annual fees, called ongoing charges figures (OCFs) or annual management charges (AMCs).

The size of these charges can vary:

• Index tracker funds: Since these funds don’t require as much active management their fee structures are usually lower, such as 0.05% to 0.20% annually for passive funds tracking market indices.
• Active funds: The fees for these funds will be higher because they’re actively managed and require a fund manager to make investment decisions. For example, this type of fund might charge 0.50% to 1.00% annually.
• Specialist funds: Some niche funds charge even more, sometimes exceeding 2% annually for alternative strategies or frontier market exposure.

Fund charges are deducted automatically from the fund's value before returns are calculated, so you don't see these charges explicitly but they do affect your investment performance.

What are drawdown or income-payment charges?

Once you start taking income from your SIPP in retirement, some providers may charge additional fees for administering drawdown or processing income payments.

Common drawdown charges might include:

• Drawdown setup fee: Some providers charge £100 to £300 for setting up flexi-access drawdown when you first start taking income, although many now include this as part of standard administration.
• Ongoing drawdown fee: Some providers levy annual charges of £50 to £150 for administering drawdown, charged in addition to standard platform fees.
• Income payment charges: You could face fees of £10 to £25 per payment for processing each withdrawal, although some providers do offer free income payments if you take regular monthly amounts.
• Ad-hoc withdrawal fees: Charges for one-off lump sum withdrawals, sometimes £25 to £50 per withdrawal.

Not all providers charge these drawdown fees, with many modern platforms including drawdown administration within their standard platform fee.

If you're approaching retirement, check drawdown charges carefully as these costs can add up significantly if you're taking regular income over 20 or 30 years.

Are there transfer or exit fees if you move your SIPP?

If you decide to move your SIPP to another provider, it’s possible you might face charges from your current provider for processing the transfer.

• Exit fees: Some providers charge £50 to £200 for closing your SIPP and transferring to another provider, although this is becoming less common as the FCA discourages exit penalties.
• Transfer administration fees: Charges for processing the paperwork and selling investments (for cash transfers) or arranging in-specie transfers. Again, some providers no longer levy these fees.
• Per-holding fees: Some providers charge separately for each investment transferred, such as £10 to £25 per holding, which can become expensive if you hold many different investments.
• Market value adjustments: Some older pension contracts apply penalties if you transfer out during certain market conditions, potentially reducing your transfer value by several percentage points.

The FCA has restricted exit fees in recent years in a bid to protect consumers, requiring that fees are reasonable and proportionate. If a provider charges excessive exit fees, this might indicate you should switch providers anyway, accepting the one-time cost to benefit from lower ongoing charges in the future.

Although it might seem counterintuitive, you should check exit fees before opening a SIPP, because knowing you can leave without penalty provides flexibility if better providers emerge or your circumstances change.

Do property investments inside a SIPP cost extra?

Yes, full SIPPs that allow commercial property investment often charge substantial additional fees for holding and administering property assets.

Common property-related charges include:

• Property holding fee: Possibly around £200 to £600 per year for each property held in your SIPP, covering the additional administration complexity.
• Property purchase fees: £500 to £2,000 when buying property through your SIPP, covering legal work, surveys, and registration.
• Property sale fees: Similar charges of £500 to £2,000 when selling property from your SIPP.
• Rent collection fees: If your SIPP property generates rental income, providers might charge fees for collecting and administering this income.
• Valuation fees: Annual property valuations required for regulatory purposes, sometimes £200 to £500 per property.

These costs can obviously mount up quite quickly, which is one of the reasons commercial property investment through SIPPs is unsuitable for most people. Unless you have a large pension pot (£250,000 or more) and specific reasons for holding commercial property directly, accessing property exposure through Real Estate Investment Trusts (REITs) or property funds is generally far more cost-effective.

How much does a SIPP cost per year?

Total SIPP costs vary enormously depending on your provider, pension pot size, trading frequency, and investment choices.

What are average SIPP charges in the UK?

While every investor's situation is different, broad cost ranges might help you understand what's normal and what's excessive.

• Platform fees: These often range between 0.10% to 0.45% annually, with most platform SIPPs clustering around the 0.25% to 0.35% mark.
• Dealing charges: £5 to £12 per trade for shares and ETFs seems to be the norm, while fund dealing is often free or just £1 to £2 per transaction.
• Fund charges: Investment funds might charge anywhere from 0.05% to 1.50% a year, depending on whether you hold cheap index trackers or expensive active funds.
• Drawdown charges: £0 to £150 annually, with modern providers increasingly including drawdown administration in standard fees.

Total annual costs: For a typical SIPP investor holding low-cost index funds and trading infrequently, total annual costs are likely to range from 0.30% to 0.60% of the pension pot’s value. For example, on a £100,000 SIPP, that's £300 to £600 per year.

SIPP investors who trade frequently or who hold expensive active funds might pay 1% to 1.5% or more annually, significantly impacting long-term returns, which is one of the reasons overtrading is a bad idea.

What's the difference between flat and percentage-based fees?

SIPP providers use different fee models, each with advantages depending on your pension size and investment approach.

Percentage-based fees

Charged as a percentage of your pension pot, these fees increase as your pension grows. A 0.25% fee costs £50 on a £20,000 pension but £500 on a £200,000 pension.

• Advantages: Affordable for small pensions, costs scale with the service value you're receiving, no sudden cost jumps as your pension grows.
• Disadvantages: Can become expensive on large pensions, costs increase even if the service quality doesn't improve, no incentive for the provider to help you minimise charges.

Flat fees

Fixed annual charges regardless of pot size, often ranging from £100 to £300 per year.

• Advantages: Cost-effective for large pensions, with predictable annual costs, giving you a clear understanding of what you'll pay.
• Disadvantages: Expensive for small pensions (£200 on a £10,000 pot equals 2% annually), can discourage people with smaller pensions from investing.

Hybrid models

Some providers combine approaches, such as 0.35% annually up to a maximum of £300, offering percentage fees for smaller pots but protecting larger pension holders from excessive costs. This hybrid approach is increasingly common.

Which fee model works best for large vs small pension pots?

The best fee structure for your own depend will largely depend on the size of your pension pot, which is why it’s so important to calculate actual costs rather than just comparing headline rates.

Comparison of common SIPP pricing models

Rule of thumb for different pensions sizes:

• Small pensions (under £60,000): Percentage fees or capped fees may well cost less than flat fees. A £200 flat fee on a £20,000 pension equals 1% annually, which is relatively expensive.
• Medium pensions (£60,000 to £120,000): Costs become similar across different pricing structures, so you should calculate specific amounts based on your exact pot size to decide on the best option.
• Large pensions (over £120,000): Flat fees or capped percentage fees could be significantly cheaper for these larger pension pots. A 0.35% fee on £300,000 would cost £1,050, which means a £200 flat fee would save you £850.

As your pension grows, you should regularly review whether your fee structure remains competitive or whether switching to a provider with better pricing for larger pots would save you money.

How do you find a reliable SIPP cost comparison tool?

There are quite a few tools you can use to compare SIPP rates and charges.

• MoneyHelper’s comparison tools: The government-backed MoneyHelper service offers pension comparison tools and calculators showing how different charging structures affect your pension over time.
• Independent financial comparison websites: Several UK financial comparison sites provide SIPP fee comparisons, although it is important to remember that these sites sometimes earn referral commissions, which might influence their recommendations.
• Comparing SIPP providers manually: Another approach to comparing SIPP fees is to request detailed fee schedules from several providers you’re considering, and then calculate your likely costs with each one based on your pension size, expected trading frequency, and investment preferences.

Before considering any provider, you should verify that they're authorised on the FCA Register.

What other factors should you consider besides price?

While it’s important to minimise your pension costs as much as possible, choosing a SIPP based purely on price can be a false economy if you sacrifice essential features, investment options, or service quality.

These are some of the other factors you should consider alongside rates and charges.

• Range of investments: Some low-cost providers might offer a more limited range of investment choices. If they don't provide access to the specific funds or shares you want to hold, their cheap fees don't help you.
• Service: A provider charging slightly more but offering responsive customer service, intuitive platforms, and helpful support might provide better value than a rock-bottom provider with poor service that makes managing your pension more time consuming or frustrating.
• Platform reliability: Check reviews about platform uptime and technical issues. A platform that frequently crashes or has slow trade execution can cost you money through missed opportunities or failed trades.
• Research and tools: Providers offering quality research, portfolio analysis tools, and financial planning calculators can add value beyond just holding your investments, particularly for less experienced investors.
• Access to advice: Some providers include access to financial advisers or managed portfolio services. If you need guidance, paying slightly higher fees for a provider offering advice might save money compared to paying for external advice separately.

The key is to balance cost-effectiveness when it comes to rates and charges, with these other factors relating to service and investment management, in order to find a provider offering genuinely good value rather than just the cheapest headline rate.

How do you calculate your total SIPP cost?

Understanding your true total cost requires taking into account all the different charges you'll pay, and how your approach to investments might impact those other charges.

What is the total expense ratio (TER) and how is it different from OCF?

These terms describe how fund costs are disclosed, although they're used somewhat interchangeably in practice.

• Ongoing Charges Figure (OCF): This is the current standard measure, showing all predictable annual costs of holding a fund including management fees, administration costs, and regulatory expenses. The OCF is expressed as a percentage of the fund's value and is deducted from the fund's performance before returns are reported.
• Total Expense Ratio (TER): This was the previous standard measure, broadly equivalent to the OCF but with a slightly different methodology for calculations. You'll rarely see TER mentioned anymore as OCF has replaced it.

What OCF doesn't include: Transaction costs within the fund (when the fund manager buys and sells investments), performance fees (charged by some funds if they exceed benchmarks), and entry or exit charges (though these are now rare).

For most investors, the OCF gives you a good understanding of fund costs, although recognising that it excludes transaction costs is important for funds that trade frequently.

How do fund fees and platform charges combine?

Your total SIPP cost is the sum of platform charges and weighted average fund charges across your holdings.

Let’s look at an example of how those weighted averages might work.

Imagine you hold a £100,000 SIPP with these holdings:

• £40,000 in a UK equity tracker (0.07% OCF)
• £30,000 in a global equity fund (0.45% OCF)
• £20,000 in an emerging markets fund (0.75% OCF)
• £10,000 in cash (0% OCF)

Your weighted average fund charge is:

(£40,000 × 0.07%) + (£30,000 × 0.45%) + (£20,000 × 0.75%) + (£10,000 × 0%) =

£28 + £135 + £150 + £0 = £313, which equals 0.31% of your total pot.

If your platform charges 0.25%, your total cost is 0.56% (0.25% platform + 0.31% funds) = £560 per year.

This calculation shows why focusing only on platform fees misses a significant portion of your true costs. Fund selection matters as much as platform selection for managing total expenses.

Can you estimate your annual cost based on your pot size?

You can build a fairly reasonable estimate using your pot size, provided you also take into account your expected trading frequency and the approach you plan to take with your investment strategy.

Example calculation for an £80,000 SIPP:

Platform fee: 0.25% × £80,000 = £200

Fund charges: Holding low-cost index funds averaging 0.15% OCF: 0.15% × £80,000 = £120

Dealing charges: 6 trades per year × £7.50 = £45

Total annual cost: £200 + £120 + £45 = £365, equalling 0.46% of pot value

The investor in this example pays £365 a year, which over 25 years at 5% growth compounds to over £17,000 in fees paid (although as a percentage of the growing pot, this remains roughly constant at 0.46%).

Compare this to an investor paying 1.2% total annual costs:

£80,000 × 1.2% = £960 per year, costing £595 more annually and compounding to over £45,000 over the same period of 25 years.

It’s a good idea to run these types of calculations for your own specific circumstances in order to understand what you'll actually pay and whether switching providers would generate meaningful savings.

How do SIPP fees interact with tax rules?

The tax treatment of SIPP fees can affect your overall pension costs and retirement planning.

Are SIPP fees tax-deductible?

Some investors mistakenly believe SIPP fees can be claimed against income tax like pension contributions can, but this isn't correct. Fees simply erode your pension value over time.

Fees are deducted from your pension pot automatically, reducing your pension wealth. Since pension withdrawals (beyond the 25% tax-free amount) are taxed as income, having a smaller pension due to fees means you'll pay slightly less tax on withdrawals in retirement.

Of course, this isn't really a benefit as you're still worse off overall. Paying £1,000 in fees might reduce your eventual tax by £200 to £400 (depending on your tax rate in retirement), but you've still lost £1,000 from your pension.

Do fees reduce my pension tax relief?

No, fees don't reduce the tax relief you receive on contributions. Tax relief is calculated on the gross contribution amount before any fees are considered.

If you contribute £800 to your SIPP as a basic rate taxpayer, HMRC adds £200 tax relief giving you £1,000 in your pension. Any platform or fund fees are then deducted separately from your pension balance over time.

This means you effectively receive tax relief on the full contribution, but then pay fees from your pension afterwards. The fees themselves don't receive tax relief, nor do they reduce the tax relief on your contributions.

How are SIPP charges handled for company directors or employers?

If your limited company makes employer contributions to your SIPP, these contributions receive Corporation Tax relief as an allowable business expense. However, the SIPP fees paid from your pension pot don't provide additional Corporation Tax relief as they're being paid from your personal pension, not directly by the company.

How can you reduce the cost of your SIPP?

Several strategies can help you minimise SIPP costs without sacrificing investment quality or diversification.

Can consolidating pensions lower your fees?

Yes, consolidating multiple small pension pots into one SIPP can often reduce your total annual charges.

If you have three old workplace pensions each worth £20,000 and each charging 1% annually (£200 per pension), you're paying £600 per year in total fees. Consolidating these into a single £60,000 SIPP charging 0.35% annually would cost £210, saving £390 per year.

In addition to the fact that you can move older, less cost effective pensions to a new SIPP with a better fee structure, many providers also offer lower percentage fees or fee caps that become more favourable as pot sizes increase, which means consolidation can often unlock these better fee tiers as well.

However, if you are thinking of consolidating your private pensions you should check:

• If there are any exit penalties on your old pensions
• If there are any valuable guarantees you'd lose by transferring
• Whether the new SIPP's total costs (including fund charges) are genuinely lower than your combined current costs.

For more information about consolidation, see our guide to Transferring into a SIPP.

Are index funds and ETFs cheaper than active funds?

Yes, passive index funds and ETFs should charge lower ongoing fees than actively managed funds, making them attractive for cost-conscious investors.

For example, index tracker funds might offer an OCF of 0.05% to 0.20% a year, whereas the OCF for an actively managed fund might be somewhere between 0.50% and 1.50% a year.

On an £80,000 SIPP, the difference between an index tracker that charges 0.10% a year, and an active fund that charges 1%, equates to £720 a year. Over 25 years, this compounds to substantial amounts even before considering whether the active fund actually delivers better performance to justify its higher fees.

Research consistently shows that the majority of active funds fail to beat their benchmark indices after fees over long periods, making low-cost index funds a sensible default choice for most investors.

That said, some specialist areas (emerging markets, smaller companies, certain bond strategies) might benefit from active management. The key is being selective about where you pay for active management rather than defaulting to expensive active funds across your entire portfolio.

How can you limit trading and withdrawal costs?

Reducing unnecessary trading and being strategic about withdrawals can lower your costs a lot over time.

• Avoid overtrading: Constantly buying and selling investments generates dealing charges that erode your returns. Research shows that frequent traders often underperform patient long-term investors, so it’s probably wiser to set a clear investment strategy and then stick to it rather than reacting to short-term market moves.
• Batch trades: If you're adding money regularly, consider accumulating cash for a few months then making larger quarterly trades rather than many small monthly trades, as this should reduce your dealing charges.
• Use regular investment services: Many providers offer free or reduced-cost dealing for regular monthly investments, turning what would be 12 separate trades costing £90 per year into free transactions.
• Choose funds over individual shares for smaller trades: If you're investing small amounts across multiple holdings, holding funds rather than individual shares reduces dealing charges and provides instant diversification.

When it comes to withdrawal fees, you should try to choose providers that don't charge per-withdrawal fees or who offer free regular income payments.

And if you are with a provider who charges per-withdrawal, consider taking income quarterly rather than monthly.

How often should you review your SIPP provider's charges?

You should review your SIPP charges each year as part of your regular pension check-up, and also double check the rates and charges anytime your circumstances change significantly.

Annual review triggers:

• Your pension pot has grown substantially, potentially making different fee structures more attractive
• Your provider announces fee increases
• New competitors enter the market with better pricing
• Your investment approach changes (becoming more or less active).

Major change triggers:

• You consolidate other pensions, significantly increasing your SIPP value
• You approach retirement and start considering drawdown charges
• Your provider is acquired or merges with another firm
• You're dissatisfied with the service you’re receiving relative to the fees you’re paying.

What are the risks of choosing a SIPP based on cost alone?

While minimising fees is obviously important, you shouldn’t select a SIPP based solely on price, particularly if the difference in fee structure is very small.

It’s important to also consider the range of investment options, the platform and its accompanying tools, and the provider’s customer service ratings.

Are very low-cost SIPPs always safe?

Not necessarily. While many low-cost providers are entirely legitimate and well-regulated, extremely cheap fees can sometimes indicate that there might be trade-offs. For instance, some of the cheapest providers might offer:

• Reduced investment range: Ultra-low fees might sometimes come with limited investment choices, undermining your investment strategy if the platform doesn’t offer the asset you want to hold.
• Hidden charges: Some providers advertise very low platform fees but compensate with much higher dealing charges, drawdown fees, or other charges that aren't obvious initially.
• Limited service: Providers might offer rock-bottom fees but provide minimal customer support, making it difficult to get help when you need it.
• Poor platform technology: Cheap providers sometimes underinvest in technology, which can result in unreliable platforms, slow execution, or missing features.

This doesn't mean you should avoid low-cost providers, many of which offer excellent value. But it’s important to compare more than just fees, and to also weigh up if there are any trade-offs for those lower charges.

What should you check before joining a "cheap" provider?

Before committing to a provider primarily because of low fees, verify several crucial factors:

• Complete fee schedule: Request the full fee schedule including all charges, not just headline platform fees. Calculate your total expected costs including dealing charges, fund charges, and drawdown fees if applicable.
• FCA authorisation: If the provider’s fee structure seems too good to be true, it’s just possible it actually might be. You should double check that the provider is authorised and regulated by the FCA by checking the FCA Register.
• Regulatory track record: Research whether the provider has regulatory warnings, fines, or enforcement actions from the FCA, which might indicate problems with compliance or customer treatment. This info is available through the firm’s entry in the FCA Register as well.
• Investment range: Confirm they offer the specific investments you want to hold. Saving on fees doesn't help if you can't actually build your desired portfolio.
• Customer reviews: Read independent reviews on sites like Trustpilot or forums to understand other customers' experiences, particularly regarding customer service quality and how the provider handles problems.

How does FCA regulation and FSCS protection safeguard your SIPP?

Regulatory protections provide you with important safeguards for your pension, although they don't protect you against investment losses from poor investment decisions.

FCA regulation:

The Financial Conduct Authority regulates SIPP providers, setting rules for capital adequacy, governance, conduct, and customer treatment. FCA-authorised firms must meet minimum standards for financial stability and operational competence.

If a SIPP provider breaches the financial regulations, the FCA can fine them, impose restrictions, or in serious cases withdraw their authorisation and wind up the firm.

FSCS protection:

The Financial Services Compensation Scheme (FSCS) is designed to protect consumers from the impact of an FCA-authorised firm going bust. This scheme pays compensation if a bank, insurer, or other FCA-authorised business goes bankrupt and is unable to pay you the money it owes you.

It’s worth noting that there is a cap on FSCS protection, which is currently £85,000 per person per authorised firm.

Frequently Asked Questions

What’s the average SIPP fee in 2025?

The average platform fee for SIPPs is currently around 0.25% to 0.35% a year, with dealing charges ranging from £5 to £12 per trade.

When you add fund charges (averaging 0.15% to 0.50%, depending on investment choices), the total annual costs for a typical SIPP investor could range anywhere from 0.40% to 0.85% a year.

Of course, those are just averages and your own costs will depend heavily on your provider, pension size, trading frequency, and investment selections.

Why do SIPP fees vary so much between providers?

SIPP fees vary so much because different providers target different types of customers and offer different service levels.

Discount platforms targeting experienced, cost-conscious investors who need minimal support charge lower fees, while full-service providers offering research tools, financial planning support, and comprehensive customer service are likely to charge more to cover these additional costs.

Providers allowing specialist investments like commercial property charge premium fees reflecting the complex administration these assets require.

Are SIPPs more expensive than workplace pensions?

Some SIPPs can be more expensive than workplace pensions, while others might have similar pricing or even be slightly cheaper.

Workplace pensions benefit from economies of scale and employer negotiation, which is why they have an average annual fee of just 0.48% with no dealing fees, according to research from the Department for Work & Pensions.

SIPPs might charge anywhere from 0.1% to 0.45% a year for platform fees, but they also charge dealing fees on top which means they can be as cost effective as a workplace pension (or in some cases even cheaper) if the pension holder trades very infrequently, or significantly more expensive if a lot of dealing fees are added to the annual platform fee.

Do I still pay fees if my SIPP holds only cash?

Yes, you'll still pay the platform fees even if your SIPP only holds cash, since those fees cover account administration regardless of what you're invested in.

But you won’t pay fund charges (since you're not holding funds) or dealing charges (since you're not trading).

Of course, holding a lot of cash in your SIPP for extended periods of time generally isn’t a good idea, because you're paying platform fees while earning minimal returns, and inflation erodes the real value of cash over time. Some cash is sensible for planned withdrawals or investment opportunities, but most of your SIPP should be invested for growth if you're still years from retirement.

Do I pay a fee to take money from my SIPP?

That will depend on your provider. Some SIPP providers include drawdown and withdrawal administration within their standard platform fee at no extra cost, while others do charge drawdown setup fees, ongoing drawdown fees, or per-withdrawal charges.

If you're approaching retirement, you should check these charges carefully because they can soon add up over 20 or 30 years of taking retirement income. Many modern providers include free income payments for regular monthly withdrawals, only charging for ad-hoc lump sums, which can make your costs more predictable.

Can I switch to a cheaper SIPP provider?

Yes, you can transfer your SIPP to another provider offering cheaper fees, although you should check whether your current provider charges exit fees and calculate whether the long-term savings justify any transfer costs and temporary loss of market exposure  during the transfer period.

What happens to fees when I die or transfer my SIPP?

If you die, your SIPP provider continues charging normal platform and fund fees until your beneficiaries claim the pension or it's transferred to beneficiary drawdown.

Some providers waive fees during the claims process, while others continue charging, so this varies by provider. Your beneficiaries should notify your provider quickly to minimise fees during administration.

If you transfer your SIPP to another provider, your old provider might charge exit fees, while your new provider begins charging their fees once the transfer completes. During the transfer period you'll usually pay fees to your old provider until funds leave, then start paying fees to your new provider once they arrive.