Answers · UK 2025/26
What is the difference between a group personal pension and a SIPP?
A Group Personal Pension (GPP) is a workplace arrangement where an employer selects a pension provider and makes contributions alongside employees -- investment choice is limited to the provider's fund range. A SIPP (Self-Invested Personal Pension) is individually held, offering much wider investment choice including shares, property, and ETFs, but typically carries higher charges.
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Both a Group Personal Pension (GPP) and a Self-Invested Personal Pension (SIPP) are defined contribution pensions, meaning your retirement income depends on how much you contribute and how your investments perform. However they differ significantly in structure, flexibility, and cost. **Group Personal Pension (GPP)** - Set up by an employer with a chosen provider (e.g. Aviva, Legal & General, Nest) - Employer contributions paid directly into the scheme - Investment choice limited to the provider's fund menu (typically 10--50 funds) - Default fund available for employees who do not want to choose - Charges usually negotiated lower due to group buying power -- often 0.3%--0.6% AMC - Auto-enrolment minimum rules apply - Regulated by The Pensions Regulator **Self-Invested Personal Pension (SIPP)** - Set up individually by the member directly with a provider - No employer involvement required (though employers can contribute) - Very wide investment universe: individual stocks, ETFs, investment trusts, commercial property, gilts, cash - Full-SIPPs (for property etc.) require a specialist trustee and cost significantly more - Platform charges typically 0.1%--0.45% plus dealing charges - Suitable for experienced investors comfortable managing their own portfolio - Regulated by the FCA **Tax treatment -- identical** Both receive pension tax relief at your marginal rate. Both benefit from the £60,000 Annual Allowance. Both allow a PCLS of up to 25% (capped at £268,275 lifetime). **Which should I choose?** For most employees, staying in a GPP is sensible -- especially if the employer contributes generously. A SIPP makes sense if: - You are self-employed (no employer to provide a GPP) - You want to consolidate old workplace pensions - You want specific investments not available in your GPP - You are a sophisticated investor managing your own portfolio **Can you have both?** Yes. Many people contribute to an employer's GPP to get the employer match, then also hold a SIPP for additional self-directed saving.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.