The clue is the name - self-invested personal pensions.
A SIPP allows you to make your own investment decisions giving your greater control and investment flexibility. In this sense they are DIY pension plans.
However, most people who set up a SIPP don’t actually take use the do-it-yourself option but invest in range of pension funds or portfolios in the same they would in a personal pension.
This means that in many cases ‘personal pensions’ and “self-invested personal pension” are effectively the same. However, there are some important differences:
There are basically three types of SIPPs
SIPPs can invest in a wide variety of assets, from stocks and shares to cash to property. The types of permitted investments include:
SIPPs can also borrow money to purchase some investments. For example, a SIPP can raise a mortgage to part-fund the purchase of a property. Such properties would normally then be rented out and the rental income, received by the SIPP, can be used towards servicing the mortgage repayments and the costs of running.