SIPPs explained in depth: Learn how Self-Invested Personal Pensions give you control over your retirement planning, what the tax benefits are, and how Private Client Consultancy helps expats manage SIPPs globally: from Spain to Switzerland and beyond.
If you’re a British expat or have worked in the UK and are now living in Spain, the EU, Switzerland or even the United States, understanding your pension options is critical.
You may have heard the term SIPP, but what does it really mean, and why is it so relevant for people living overseas?
In this guide, “SIPPs Explained“, we’ll break down exactly what a SIPP is, how it works, and whether it’s the right move for you.
We’ll also cover the specific tax and legal implications of managing a SIPP from abroad, particularly if you’re a resident in Spain or planning to retire there.
A Self-Invested Personal Pension (SIPP) is a UK government-approved pension scheme that gives individuals greater control over how their retirement savings are invested.
Unlike traditional pension plans, where investment choices are typically made by the provider, SIPPs allow you to choose and manage your own investments, from stocks and bonds to ETFs and even commercial property.
This flexibility makes SIPPs particularly attractive to experienced investors and those seeking tailored retirement planning.
However, with this freedom comes increased responsibility, as poor investment choices can negatively impact your future income.
Think of it as a “DIY” pension, one that still benefits from tax advantages but puts you in control of how your retirement savings are invested.
SIPPs function similarly to other defined contribution pensions: you (and possibly your employer) make contributions into the plan, which are then invested.
Over time, the returns compound to build your pension pot.
What sets SIPPs apart is the investment freedom:
You’ll also benefit from tax relief on contributions and potentially reduce inheritance tax liabilities.
Unlike traditional pensions, SIPPs give access to a broad investment menu, including:
For UK nationals who have moved or are planning to move abroad, SIPPs offer advantages that traditional pensions simply can’t match.
These include flexibility, portability, and crucially, tax planning opportunities.
Here is a list of the major appeals:
Case Study: “James, 62, moved from the UK to Málaga. By consolidating three old workplace pensions into a SIPP and using euro-hedged funds, he cut currency risk and simplified his retirement planning.”
SIPPs offer several compelling tax incentives:
Higher and additional-rate taxpayers can reclaim further relief via self-assessment, making SIPPs a powerful tax mitigation tool for high earners.
While SIPPs are a UK-based product, their taxation depends heavily on where you reside when drawing benefits. In Spain, for example:
Elsewhere:
This is why international financial advice is essential.
At Private Client Consultancy, we can help you manage cross-border compliance and reduce unnecessary tax exposure.
SIPPs are often compared to QROPS (Qualifying Recognised Overseas Pension Schemes). While both offer pension transfer solutions, they serve different use cases.
If you’re permanently relocating outside the UK, QROPS might be more appropriate.
However, SIPPs often remain the better choice for those with ties to the UK or who seek broader investment choice.
You can find out more about their similarities and differences in this article.
Note: PCC Wealth offers guidance on both solutions. We can help you weigh the benefits based on your unique circumstances and country of residence.
A SIPP isn’t just about retirement and shouldn’t be viewed in isolation. It often forms one part of a wider financial plan, alongside:
A properly structured retirement strategy integrates your pension with other assets, considers local tax laws, and aligns with your long-term residency plans.
A SIPP is a type of personal pension but offers more investment flexibility. You can pick your own assets rather than being limited to a provider’s fund list.
Yes — most defined contribution pensions are eligible. You can consolidate them into one SIPP for easier management and investment control.
Yes, provided your provider is regulated by the FCA and your investments are managed responsibly.
SIPPs also benefit from FSCS protection (up to £85,000 per provider).
Yes. If the value of your SIPP exceeds €50,000, it must be declared via Modelo 720, even if you are not withdrawing funds.
They’re taxed as regular income under the Spanish income tax system, at progressive rates.
Careful drawdown planning can reduce the impact.
Anyone over 18 who is a UK resident for tax purposes.
You don’t need to be employed, but you must have taxable income to receive tax relief.
Non-UK residents can maintain an existing SIPP, but can’t make new tax-relieved contributions.
20%–45% tax relief on contributions.
Tax-free investment growth.
Up to 25% of the fund can be withdrawn tax-free from age 55 (57 from 2028).
SIPP funds typically fall outside your estate for IHT—though rules are evolving.
You can nominate beneficiaries to inherit your SIPP. If you die before age 75, benefits are usually tax-free (if claimed within two years).
After 75, beneficiaries pay income tax at their own marginal rate. Keeping your “expression of wishes” form up to date ensures your wishes are followed.
As we’ve outlined in this guide to SIPPs explained, these pensions offer flexible, tax-efficient retirement planning, but they’re not suitable for everyone.
They require active involvement, investment knowledge, and often international tax advice.
At Private Client Consultancy, our specialists work across Spain, the USA, Switzerland, and beyond to tailor SIPP strategies that align with your global lifestyle.
Managing your pension across borders doesn’t need to be stressful.
Whether you’re living in Spain, France, Switzerland or elsewhere in the EU, we can help you assess your options and build a flexible, tax-efficient retirement plan.
Contact us today for a personalised pension review — and discover if a SIPP is the right solution for you.
Disclaimer: Tax laws, rates, and reliefs are subject to change and may vary depending on individual circumstances and residency status. Any information provided on this website is based on our understanding of current regulations (or the date of when the content was published) and should not be considered personalised financial or tax advice. As tax obligations can differ across regions, countries and evolve over time, we strongly recommend seeking professional advice tailored to your specific situation before making any financial decisions.
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