Managing your SIPP
We’re here to give you the confidence to manage your own SIPP, supporting you today, and when you’re approaching retirement.
The basics
- With a SIPP, you have complete control and flexibility to make your own investment decisions.
- Easily manage your SIPP, by logging on to check or change your investments at any time through Internet Banking or the Mobile app.
- Transfer in old pensions, top up, or start accessing your pension benefits from age 55 (57 from 2028).
- The maximum amount you can currently contribute across all your pensions, and benefit from tax relief, is £60,000 per tax year (or 100% of your earnings, if you earn less than this). This limit is known as your Annual Allowance.
Next steps
It’s never too early to plan for retirement, here’s some steps to get you started.
Interest Rates for Self-Invested Personal Pension (SIPP)
How interest works within a SIPP
In a Self-Invested Personal Pension (SIPP) if you have a cash balance of £1 or more, we’ll pay you interest. We currently pay interest at a gross rate of 3.00%. Please bear in mind that this rate may change in the future.
How we handle the money
All the cash we hold is kept in a central account; this is called a client money account. Here is how it works:
- We earn interest on this account from our banking partners.
- We keep a portion of this interest (we expect this to be between 0.70% to 1.20%) This is called retained interest and any interest retained is used it to improve our products and services.
- The rest of the interest is paid to you at the current rate shown in the table below
Calculating and Paying Interest
We work out the amount of interest daily, and we pay it to you, yearly in March.
Interest rates are variable, which means the amount can change depending on different internal and external factors in the future.
Current interest paid
|
From |
Interest rate paid to you |
|---|---|
|
From 28/08/2025 |
Interest rate paid to you 3.00% |
|
From 18/11/2024 |
Interest rate paid to you 3.55% |
Additional Information:
- We hold uninvested cash in a central client money account, in compliance with Financial Conduct Authority (FCA) rules.
- Your money is protected under the Financial Services Compensation Scheme (FSCS).
- The retained interest is the difference between the total amount we receive from our banking partners and the amount we pay to customers.
- Please note that all interest rates can vary.
What happens when you die?
When you die, your SIPP (Self-Invested Personal Pension) can be passed to your beneficiaries, usually free from Inheritance Tax.
Your beneficiaries can choose to receive their benefits in one of the following ways:
- as a cash lump sum
- as a guaranteed yearly income, by buying an annuity from an annuity provider, or
- as a flexible income, by setting up a beneficiary drawdown.
Death benefit cash lump sums are normally not subject to Inheritance Tax.
An annuity will normally pay a regular, secure income for the rest of their life.
Drawdown allows them to keep the pension invested and withdraw an income as and when they like. With drawdown they’ll also be able to pass on anything that’s left to future generations when they die.
Some of these benefits may be taxed but this will depend on what you’ve done with your pension and your circumstances at the time of your death.
If you die before age 75
Cash lump sum and income death benefits will normally be paid tax free.
This is on the condition the payment occurs within two years of notification of death, and it’s within your Lump Sum Death Benefits Allowance (LSDBA).
This tax year the limit is £1,073,100. The LSDBA will be reduced by Relevant Benefit Crystallisation Events (RBCEs) – effectively, withdrawals already taken from your pension before your death.
Death benefits paid as a flexible income through a beneficiary drawdown are not subject to the LSDBA.
If you die after age 75
Benefits will be subject to tax at the marginal tax rate. The tax impact will vary depending on how your beneficiary chooses to access their benefits.
For example: You die after age 75 and nominate one beneficiary. Your beneficiary might decide to take their benefits as income over a period time instead of a lump sum. For example, if they earn £30,000 a year and inherit £50,000, they can withdraw £10,000 per year, taxed at 20%. This is instead of taking the whole amount as a lump sum, which could be taxed more heavily.
Remember...
Pension and tax rules can change, and any benefits will depend on individual circumstances.
You can nominate as many beneficiaries as you like, such as a spouse and a child, or a charity. Who you choose is up to you but it’s always worth regularly reviewing, especially as your life and circumstances change.
Adding or changing your SIPP beneficiaries is easy. You can do this in your account online, or through the app in the ‘Manage my SIPP’ section.
Leave it invested
Leave your SIPP invested in the way you want to, for however long you want.
Flexibility through drawdown
(Flexi-access drawdown)
Take a one-off lump sum of up to 25% tax-free, and then have the freedom to choose how and when you take out the rest of your money.
Take a taxable lump sum
(also known as an Uncrystallised Funds Pension Lump Sum (UFPLS))
Withdraw as much or as little as you like as a lump sum, with 25% of each withdrawal tax-free.
Buy an annuity
Access a lump sum up of to 25% tax-free and use the rest to buy a guaranteed regular income for life (we don’t offer an annuity, but you can transfer to an annuity provider to take your benefits this way).
Things to consider:
Lump sum allowance:
HMRC applies a limit to the lump sum(s) you can take tax-free. This is called the Lump Sum Allowance (LSA). This tax year the limit is £268,275. Your tax-free Pension Commencement Lump Sum (PCLS) is limited to 25% of your pension value, up to a maximum of the LSA (unless you have existing pension protections in place).
Money Purchase Annual Allowance:
The Money Purchase Annual Allowance (MPAA) limit applies once you start taking income from your SIPP – this could be a withdrawal from your flexi-access drawdown or taking a taxable lump sum (UFPLS). The MPAA limits impacts the amount you can pay into your SIPP in the future without incurring a tax charge. This limit is currently £10,000 each tax year (although the Government may change this in future).
Please see our Retirement guide (PDF, 304KB) for more information.
Changing the regular income on your pension
If you’ve decided that you’d like to change your regular income, please complete this short form and we’ll be in touch.
You can update the following at any time:
- Amount of your pension income.
- Payment date
- Payment frequency
- Bank details.
Please be aware any of the above changes will usually take up to 10 working days to complete.
If you're increasing your income payments from your Self-Invested Personal Pension (SIPP), please be aware of the following:
Sustainability of funds: Ensure you have sufficient funds to support the increased withdrawals over the remaining term of your retirement. Drawing too much too soon could deplete your pension earlier than expected.
Tax Implications: Increasing your income may push you into a higher tax bracket. This could result in a larger portion of your income being taxed at a higher rate. We recommend seeking tax advice to understand the full impact.
Investment suitability: Review your investment choices to confirm they remain appropriate for your needs. Your investment strategy should align with your income requirements and retirement needs.
If you need any help and guidance, you can get this free through Pension Wise. If you need any financial advice, You can visit Unbiased or Vouchedfor to find a financial adviser near you. They will charge you for this service.
We're all part of Lloyds Banking Group which incorporates many well-known companies including Lloyds, Scottish Widows, Halifax Share Dealing Ltd and Embark Investment Services Ltd. Our retirement partner for this SIPP is Scottish Widows, who have more than 200 years' experience in pensions and retirement.
Understanding the risks
The main goal of any pension scheme is to provide you with an income during retirement. There are some important things to think about that could affect the benefits you’re able to receive in the future.
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Before transferring benefits into your SIPP from another pension provider, you should check you aren’t giving up valuable feature or benefits.
Although we don’t charge you, your existing pension provider may apply a penalty, or other reduction in the value of your benefits, if it’s transferred.
If you transfer money into your SIPP from another pension, the final pension benefits you receive could be less than if you stayed in your existing scheme.
If you’re in any doubt about the benefit of transferring, we recommend that you take advice from a suitably qualified, professional adviser before arranging the transfer. There will normally be a charge for that advice.
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Most experts will tell you not to keep all your eggs in one basket, as it’ll help you to diversify and manage your overall risk appetite.
You can deal in a wide range of investments, each of which carries a different level of risk. The value of your SIPP depends on the level of risk and potential performance of the investments you choose. It’s always worth doing your research first but past performance is not a guarantee of how investments will perform in the future.
But remember, investment performance can go down as well as up and you may get back less than you originally invested. Some investments may need to be held for longer term to achieve a return.
If the value of your SIPP is small and you deal regularly in smaller amounts, dealing costs could be disproportionately high and erode the value of your SIPP.
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Your retirement benefits are not guaranteed. If you start to take income earlier than planned, the total amount may be lower than expected and may not meet your needs in retirement.
Your SIPP value may not be large enough to provide income for as long as you intended, in instances where you take a higher than planned level of income (for example as a flexi-access Drawdown) over a long period of time.
If you take a large proportion of income in a short period, you may end up paying a higher rate of tax than usual.
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Lloyds and Lloyds Bank are trading names of Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales No. 2065. Lloyds Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 119278.
