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SIPPs versus Stakeholder Pensions

SIPPs and Stakeholder pensions are both types of personal pensions but they do have a number of different characteristics and are likely to suit different people.

What is a stakeholder pension?

Stakeholder pensions were introduced in 2001 as an option for people looking for a simple pension.  They must meet a set of minimum standards, which have been set by government to make sure they are simple to use and have low charges. They tend to have less investment choice than SIPPs.


SIPPs are designed to give you greater control over your pension savings by giving you access to a wide choice of investments and much greater freedom in managing your pension fund.

In the table below we compare our Best SIPP to a typical stakeholder pension.

Best SIPP Stakeholder Pensions
Investment choice More than 2,000 funds plus shares, Investment Trusts and ETFs Stakeholder pensions typically offer around 10-200 funds. In some cases the range of funds available could be from only one fund manager. With stakeholder pensions there is often no share dealing service
Retirement options Available in annuity or drawdown Typically don't provide drawdown, only annuity
Flexibility Switch funds online at no cost May incur charges to switch or have to call to get switches processed
Platform fee From £0 - £250k:
0.3% pa
From £250k - £1m:
0.20% pa
Over £1m:
No Charge

This fee is paid by all clients. Any annual management fees or dealing fees (e.g. shares) will be in addition to this figure.
Stakeholder pensions do not incur platform fees.
Charges Annual management charge from 0.25% to 2.5% for funds, with additional fees for share dealing Typically 1.5 capped reducing to 1% after 10 years
Payment options Initial lump sum and optional monthly payments Regular and/or one-off payments; can have a minimum requirement to make monthly payments
Access to your account 24 hour access 7 days a week - view and manage your pension online, or speak to our investment experts to guide you Limited online access - if you have more than one pension you can't view them in one place. Most likely to have call centre staff on the phone
Ongoing support Access to free investment research, readymade portfolios, investment advisers and a discretionary management service No in-house research team and generally no option for readymade portfolios, direct contact with advisers or discretionary management

This is not a personal recommendation, or advice to use any of our products and services.


Past performance is not a reliable indicator of future returns

The value of your investment can go down as well as up, and you can get back less than you originally invested.

The Bestinvest Online Investment Service, including any account analysis and investment reports provided by our guidance services, is an online execution-only dealing service for investors who want to make their own investment decisions. It does not provide advice on the suitability of products and investments; if you are unsure about the suitability of any investment you should seek professional advice. Clients of our Investment Advisory Service and Managed Portfolio Service can use the website to obtain current valuations of their investments but cannot trade on these accounts online and should call their adviser if they wish to discuss changes to their investments.

Past performance or any yields quoted should not be considered reliable indicators of future returns. Restricted advice can be provided as part of other services offered by Bestinvest, upon request and on a fee basis. Before investing in funds please check the specific risk factors on the key features document or refer to our risk warning notice as some funds can be high risk or complex; they may also have risks relating to the geographical area, industry sector and/or underlying assets in which they invest. Prevailing tax rates and relief are dependent on your individual circumstances and are subject to change.

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