Halifax SIPP: How Does It Stack Up?

Halifax offers a competitive SIPP with access to a broad range of markets and investments, combined with the convenience of managing your pension alongside everyday banking. Their comprehensive online tools simplify portfolio management.
  • Last Updated: 22 Mar 2024
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Francis Hui
Get Accurate, Up-to-Date Insights on the Halifax SIPP for Your Retirement Planning. Learn About the Benefits of This Product & Its Fees & Investment Options.
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Key Takeaways
  • A Halifax SIPP is a self-invested personal pension offered by Halifax Bank.
  • They work by allowing you to take control of your pension investments and choose where to invest your funds.
  • The benefits of a include tax advantages, flexibility, and the potential for higher returns on your investments.
  • You can transfer your existing pension, but it’s important to consider the terms and conditions before making a decision.
  • The fees associated with a Halifax SIPP may vary depending on the specific plan and investment options you choose, so it’s crucial to review the fee schedule before investing.

When contemplating your retirement savings options, the Halifax SIPP presents itself as a flexible and diverse investment wrapper. 

Considering the fact that there are 1,6 million unclaimed pension pots in the UK, the importance of keeping track of your existing pensions cannot be overstated.1 

A Self-Invested Personal Pension (SIPP) offers investors the option to consolidate their existing pensions by transferring them into a single account, making it easier to manage and keep track of your retirement savings. 

The Halifax SIPP provides a variety of tax-efficient investment options, from shares and funds to bonds, making it a compelling choice for those comfortable with making their own investment decisions.

In This Article, You Will Discover:

    The team at Every Investor spends a lot of time combing through resources to provide our readers with accurate and up-to-date insights into the UK’s retirement market.

    Depending on your financial goals, a Halifax SIPP might be the right option for you.

    Read on to find out more.

    Who Is Halifax?

    Halifax is a British bank known for providing a range of financial services including mortgages, savings, credit cards, and loans. It is one of the UK’s largest mortgage lenders.

    Founded in 1853, Halifax has grown from a building society to a major banking institution, now part of the Lloyds Banking Group.

    What Is a Halifax SIPP and How Does It Work?

    A Halifax SIPP, or Self-Invested Personal Pension, is a type of pension account offered by Halifax Bank in the UK.

    It allows individuals to take control of their pension investments by giving them a wide range of investment options.

    With a Halifax SIPP, you can choose from a variety of investment assets such as stocks, bonds, mutual funds, and more.

    You have the flexibility to manage your investments as you see fit, making it a popular choice for those who want more control over their pension funds.

    Additionally, Halifax offers a range of tools and resources to help you make informed investment decisions and track your portfolio’s performance.

    A Halifax SIPP works by providing individuals with a tax-efficient way to save for retirement.

    Contributions made to a SIPP are eligible for tax relief, meaning you can receive tax benefits on your contributions.

    You can contribute to your SIPP through regular payments or lump sum deposits.

    The funds in your SIPP can be invested in a wide range of assets, allowing you to diversify your investments and potentially increase your returns.

    As you approach retirement, you can choose how to take your pension benefits, whether that’s through regular income, a lump sum, or a combination of both.

    Halifax also offers flexibility in managing your SIPP, allowing you to switch investments and make changes to your pension strategy as your circumstances and goals evolve.

    How Does the Halifax SIPP Work?

    The Halifax SIPP works as a retirement savings plan administered by AJ Bell. 

    This product gives you the freedom to choose where you want to invest your money, allowing for a diversified risk strategy. 

    Upon retirement, this SIPP provider offers different payment options, including lump sums and regular income.

    What Are the Benefits of a Halifax SIPP?

    The benefits of a Halifax SIPP include receiving tax relief on contributions

    Other benefits are:

    • no minimum investment requirements
    • no initial setup charges 
    • a fixed-rate fee structure that may be particularly beneficial for larger investment pots

    What Are the Drawbacks of a Halifax SIPP?

    The drawbacks of a Halifax SIPP include its high dealing fees. 

    Other drawbacks are:

    • the absence of a dedicated app
    • The fact that it is an execution-only product, meaning that financial advice is not included and would incur an extra cost

    Who Is Eligible to Open a Halifax SIPP?

    UK residents between 18 and 75 are generally eligible to open a Halifax SIPP.

    What Should You Consider Before Choosing a Halifax SIPP?

    You should consider your investment knowledge, the time you have available for self-management, and your long-term retirement goals before choosing a Halifax SIPP.

    Examining the fee structure and the asset classes available is also crucial if you want to find out whether this product aligns with your investment objectives.

    Fees & Charges

    The Halifax SIPP has a range of fees and charges to consider.

    These include:

    • Flat quarterly admin fee: £22,50 for SIPP values of £50,000 or less; £45,00 for values greater than £50,000.
    • Online dealing commission: £9,50 per trade, covering assets like shares, funds, and bonds.
    • Scheduled investment service: £2 per trade for regular trading.
    • Transfer-in fee: £60, capped at £300, for transferring other pensions into the SIPP.2

    Investment Options

    Investment options within the Halifax SIPP are presented on the Halifax Share Dealing platform and encompass a diverse array of asset classes.

    These include:

    • Shares: Equity in individual companies.
    • Funds: Including impact and Environment, Social and Governance (ESG) funds.
    • Exchange-Traded Funds (ETFs): Tracking indices like the FTSE100 or the S&P500.
    • Investment trusts: A publicly traded company holding different investments.
    • Bonds and gilts: Fixed returns and relative stability.
    • Special Purpose Acquisition Companies (SPACs): A shell corporation listed on a stock exchange with the purpose of acquiring a private company.3

    Flexibility & Accessibility

    The Halifax SIPP provides flexibility and accessibility by allowing 24/7 online management of your investments through the Halifax Share Dealing platform. 

    Although the product lacks a dedicated SIPP app, you can still monitor your investments via the general Halifax banking app.

    Tax Benefits & Implications

    Understanding the tax benefits and implications is crucial when considering a Halifax SIPP as part of your retirement planning strategy.

    These include:

    • Contributions to the Halifax SIPP are eligible for tax relief at your marginal rate, meaning you could reclaim up to 45% of your contribution depending on your tax bracket.4
    • The investments within the SIPP grow free from capital gains and income tax, providing a tax-efficient environment for your retirement savings to compound over time.
    • When you start withdrawing from the SIPP after reaching the minimum age of 55 (57 from 2028), you can take 25% as a tax-free lump sum, with the remaining amount subject to income tax upon withdrawal.5
    • Upon your death, the remaining SIPP funds can be passed on to your nominated beneficiaries, but the tax treatment depends on your age at death and how the funds are withdrawn by the recipients.

    Withdrawal & Retirement Options

    Various withdrawal options are available to provide flexibility in retirement.

    You can choose from:

    • Lump-sum withdrawals: You can take out a one-time lump sum, typically with 25% being tax-free.
    • Drawdown: A flexible option that allows you to withdraw varying amounts as and when needed while leaving the remaining funds invested.
    • Annuities: A guaranteed income for life or a fixed period purchased from an insurance company using your pension savings.
    • Uncrystallised funds pension lump sum (UFPLS): A method of taking lump sums directly from the pension pot without first converting it into a different income type; each withdrawal’s 25% tax free with the remaining 75% subject to income tax.6

    Customer Support & Service

    Halifax provides customer support and service for your investments via a five-day-a-week phone line, an online chat function, and secure messaging. 

    What Are the Contribution Limits for a Halifax SIPP?

    The contribution limits for a Halifax SIPP are the lower of £60,000 or 100% of your annual earnings for the 2023/24 tax year.

    If you transfer another pension into the Halifax SIPP, you are not required to make additional contributions; otherwise, a minimum one-time contribution of £1,000 is needed to start your SIPP. 

    There is no set minimum for regular monthly contributions.

    What Are the Fees & Charges Associated With a Halifax SIPP?

    The fees and charges associated with a Halifax SIPP include management fees, trading fees, and transfer charges.

    These have been discussed in depth already in this article, so feel free to scroll up if you need to refer to them again.

    What Are the Withdrawal Options?

    The withdrawal options include annuities, flexi-access drawdowns, or lump-sum withdrawals. 

    Each option has its own tax implications.

    Find out more further up in this article.

    Who Is a Halifax SIPP Suited to?

    A Halifax SIPP is suited to individuals who are comfortable making independent investment decisions and want to diversify their retirement savings. 

    It may be less suitable for those who prefer a hands-off investment approach.

    You should consider a Halifax SIPP if you are comfortable making your own investment decisions and planning for a long-term horizon where you will not need access to the funds until retirement age. 

    How Does a Halifax SIPP Compare With Other Options?

    Compared to traditional pension plans, Halifax SIPP offers more control, but requires more active management. 

    When contrasted with other SIPPs, Halifax may come out ahead in terms of fees, but may lag in other areas, such as not having a dedicated app.

    What Are Clients Saying About Halifax?

    Although the sample was very small at 167 reviews, Halifax Share Dealing’s Trustpilot rating is a very low 1.4 out of a possible five stars for poor customer service.7

    On the other hand, customers participating in the Which? review commented that the fixed fee ‘works out hundreds of pounds cheaper when you have a large portfolio’ and ‘low cost means less functionality, so you need to be an experienced investor to go for this platform’.8

    Opening a Halifax SIPP

    Opening a Halifax SIPP involves completing the necessary paperwork and making an initial contribution.

    What Steps Do You Need to Follow?

    You need to download the application forms from the Halifax website and post the completed forms to the SIPP administrator, AJ Bell.

     Alternatively, you can scan the original signed forms and email them to the provided address.

    What Documents Do You Need?

    The documents you need are proof of identity (such as a passport or driver’s licence), proof of residence, your National Insurance information, your banking details, and any other forms required.

    Regulatory Details

    The Halifax SIPP is regulated by the Financial Conduct Authority (FCA), promoting compliance with financial laws and protections for the investor.

    You are also able to make a claim of up to £85,000 from the Financial Services Compensation Scheme in the event that your SIPP provider goes out of business and can’t reimburse you.

    Common Questions

    What Makes a SIPP a Viable Option for Pension Savers

    How Competitive Are SIPP Fees

    Can a SIPP Be Managed Online Efficiently

    What Investment Choices Are Available Through a SIPP

    Why Choose Halifax SIPP for Your Retirement Planning

    Is a Halifax SIPP Safe

    What Is the Minimum Contribution Required to Open a Halifax SIPP

    Can I Transfer My Existing Pension into a Halifax SIPP

    How Often Can I Access & Manage My Investments Within a Halifax SIPP

    Does Halifax Provide Investment Advice for SIPPs

    Are There Any Penalties for Early Withdrawal From a Halifax SIPP

    What Happens to My Halifax SIPP if I Change Jobs?

    Can I Manage My Halifax SIPP Online

    How Long Does It Typically Take to Open a Halifax SIPP Account

    What Happens to My Halifax SIPP When I Die

    In Conclusion

    A Halifax SIPP offers a variety of investment options, tax efficiencies, and flexibility, but it also comes with certain drawbacks like high dealing fees and a lack of a dedicated app. 

    Determining whether this product may be right for you hinges on your comfort with self-directed investment and your financial goals for retirement. 

    Given its specific features and limitations, it is essential to consider if your investment objectives are compatible with what a Halifax SIPP has to offer. 

    Before making a decision, consulting a qualified financial advisor can provide tailored guidance to ensure that you are making the most informed choices regarding a Halifax SIPP for your retirement planning.

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