A Self-Invested Personal Pension (SIPP) gives you control over your own investments, but that control comes with a layered fee structure that can be confusing to compare between providers. Small percentage differences compound significantly over a multi-decade pension, so understanding what you're actually paying matters as much as choosing the right investments.
The main layers of SIPP charges
- Platform or administration fee — what the SIPP provider charges to hold and administer your account, often a percentage of your pot (sometimes tiered, dropping as your balance grows) or a flat annual fee
- Fund charges (Ongoing Charges Figure) — what each fund you invest in charges to manage the underlying investments, typically ranging from very low for passive index trackers to considerably higher for actively managed funds
- Dealing or trading charges — a fee each time you buy or sell shares, investment trusts, or ETFs (funds usually trade for free, direct shares often don't)
- Other charges — may include a fee for taking an income in retirement (drawdown), transferring out to another provider, or holding cash
Percentage vs flat-fee platforms
Percentage-based platform fees suit smaller pots because the amount charged is small in cash terms, but they become expensive as your pot grows into six figures — 0.25% on £250,000 is £625 a year and keeps rising. Flat-fee platforms charge the same amount regardless of pot size, which is cheaper for larger pots but relatively more expensive for small ones. Many platforms cap their percentage fee for direct share and ETF holdings, so the right choice often depends on both your pot size and what you invest in.
Worked example: why fees compound
| Total annual charge | Value after 25 years on a £100,000 pot growing at 5% before charges |
|---|---|
| 0.5% | ≈ £299,000 |
| 1.0% | ≈ £265,000 |
| 1.5% | ≈ £235,000 |
A 1 percentage point difference in ongoing charges can mean tens of thousands of pounds less by retirement — this is why comparing the total charge (platform fee plus fund charges plus dealing costs) matters more than any single headline number.
How to compare providers properly
- Add up ALL charges — platform fee, typical fund OCF for the investments you'll actually hold, and expected dealing costs based on how often you trade
- Check whether the platform fee is capped for funds/shares/ETFs, since this changes the picture for larger pots
- Look at exit fees or transfer-out charges, which some providers still apply
- Factor in whether you'll want to buy individual shares (higher dealing costs) or just funds (often free to trade)
Common mistakes
The biggest mistake is comparing only the platform fee and ignoring fund charges, which are often the larger cost over time, especially with actively managed funds. Frequent traders also sometimes underestimate how dealing charges add up, while buy-and-hold investors sometimes overpay for a platform built for active trading they don't need.
What to do next
List the investments you actually plan to hold, get the fund OCFs, and calculate the total annual cost (platform fee + fund charges + realistic dealing costs) for two or three providers using your actual or projected pot size — not just the headline platform rate.