The SIPP Market

Since SIPPs were first introduced in 1990, the SIPP market has grown rapidly so that there are now over 500,000* plans in force - an annual growth rate of around 20%. Whilst the reality is that SIPPs are now a mainstream pension product, they are still perceived to be complex products which are difficult to administer and expensive as a result.

Our belief is that despite the significant growth already seen and the perception of complexity, the SIPP market is set for further expansion for a variety of reasons including:

• Pension provision in the UK continues to move from the defined benefit / final salary model to the defined contribution / personal pension model with vast net inflows to the latter predicted over the next 10 years.
• Since April 2007, individuals can be contributing members of company pension schemes and personal pensions at the same time - it is estimated that over 1 million higher rate tax payers can now contribute to a SIPP whereas before April 2007 they were barred from doing so due to their membership of a company scheme.
• Since the 1980s the market has increasingly demanded open architecture products with the widest possible investment choice. This is reflected in the explosion in individual share ownership, self select ISAs and, of course, SIPPs.
• The ability to self invest protected rights will open up a further multi-billion pound market.

In this context, SIPP market growth of over 20% per annum to date looks set not only to continue but to increase.