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SIPPs and consolidating old pensions

What a SIPP actually is, who benefits from one, how to track down the pension pots you’ve forgotten — and the transfers you should never rush.

What a SIPP is (and isn’t)

A Self-Invested Personal Pension is a pension wrapper you open and control yourself — same tax relief, same access rules (from age 55, rising to 57 in 2028), same 25% tax-free cash as a workplace scheme. The difference is choice: instead of your employer’s shortlist, you pick the platform and any mainstream investment — which, per the index fund guide, should usually be one cheap global tracker anyway. “Self-invested” describes the wrapper’s flexibility, not a requirement to be clever.

A SIPP does not replace your workplace pension — no employer will pay their contributions into it (though some will salary-sacrifice into it if asked). The workplace scheme captures the match; a SIPP is for everything beyond that.

Who actually benefits

Costs mirror the ISA world: percentage-fee platforms suit small pots, flat-fee platforms win as the pot grows — the arithmetic in the fees guide applies with bigger numbers, because pensions become most people’s largest account.

Finding the pensions you’ve lost

The average UK career now spans ten or more employers, each leaving a pot behind; billions of pounds sit in pensions the owners have lost track of. To hunt them down: dig out old payslips and P60s for scheme names, then use the government’s free Pension Tracing Service (gov.uk) to find contact details for any employer’s scheme. Write and ask for a current statement, the charges, and any special features. The Pensions Dashboard, connecting gradually through 2026, will eventually show them all in one place.

Consolidating: usually good, occasionally disastrous

Merging old defined-contribution pots into one modern, cheap scheme (a SIPP or your current workplace scheme) means one statement, one investment strategy, lower charges and a simpler retirement. Transfers are done electronically between providers and normally take days to weeks. But check three things before moving each pot:

  1. Is it defined benefit (final salary)? A DB pension is a guaranteed income for life, not a pot — transferring out is almost always wrong, and for values over £30,000 the law requires regulated financial advice first. Treat DB transfers as a “no” unless a specialist adviser argues otherwise.
  2. Any safeguarded or valuable features? Older policies can carry guaranteed annuity rates (sometimes worth double today’s market rates), protected tax-free cash above 25%, a protected early retirement age, or with-profits exit penalties. Ask the provider directly: “Does this policy have any guarantees, protected benefits or exit charges?” — and don’t transfer until you understand the answer.
  3. Exit fees and timing. A few legacy schemes charge to leave, and with-profits funds may apply a market value reduction. Usually small versus decades of lower charges, but know before you sign.

Plain modern DC pots with none of the above? Consolidate freely — the paperwork is easier than it looks and future-you inherits one tidy pension instead of a shoebox of forgotten ones.

The one-line summary

Use a SIPP for pension saving beyond the employer match (or instead of nothing, if self-employed), trace every old pot, and consolidate the plain ones into one cheap scheme — but treat defined benefit pensions and old policies with guarantees as “do not touch without advice”.

Last reviewed: July 2026.