SIPP vs Workplace Pension: Which Is Better?
A SIPP has better funds and lower fees than your workplace pension. So why is it the second account to feed, not the first? The order matters more than the choice between them.
SIPP vs workplace pension at a glance
| Feature | Workplace pension | SIPP |
|---|---|---|
| Fund choice | 5-30 funds | Thousands of funds/ETFs |
| Employer contributions | Yes (3% minimum) | No |
| Salary sacrifice | Often available | Not available |
| Typical platform fee | 0.3%-0.75% | 0%-0.45% |
| Minimum access age | 57 (from 2028) | 57 (from 2028) |
Both count toward the same £60,000 annual allowance. Most people should run both.
Key takeaways
A SIPP gives you full control over your investments with thousands of funds to choose from, while a workplace pension limits you to a shortlist picked by your employer.
Never leave employer contributions on the table. If your employer matches up to 5%, contribute at least that much to your workplace pension before putting anything in a SIPP.
Salary sacrifice through your workplace pension saves you National Insurance at 8%, which a SIPP cannot replicate. On a 50,000 salary with 5% contributions, that is an extra 200 per year.
The smartest strategy for most people is both: contribute enough to your workplace pension to capture the full employer match, then direct any extra into a low-cost SIPP with better fund options.