Can I Have a SIPP and a Workplace Pension at the Same Time?

Yes. There is no rule that says you can only have one type of pension. You can contribute to a SIPP and a workplace pension simultaneously, and many engaged investors do exactly that.

How it works in practice

Your workplace pension and your SIPP are completely separate accounts. Contributions you make to one have no bearing on the other. You can be enrolled in your employer's scheme, receiving employer contributions, and also be paying into a SIPP each month - all at the same time.

The only limit that applies across both is the annual allowance.

The annual allowance

The annual allowance is the total amount you can contribute across all your pensions in a single tax year and still receive tax relief. For most people, that is currently £60,000 or 100% of your earnings - whichever is lower.

That limit covers everything combined - your workplace pension contributions, your employer's contributions, and anything you pay into your SIPP. As long as your total stays within that figure, you receive full tax relief on all of it.

If you earn less than £60,000, your earnings are the effective cap. If you contribute more than the annual allowance, you will face a tax charge on the excess.

Why run both at the same time?

The most common reason is employer matching. If your employer contributes to your workplace pension, those contributions are essentially free money - and the right move is to keep receiving them. A SIPP sits alongside that, giving you control over an additional pot of money that you invest on your own terms.

The other common reason is consolidation. A SIPP gives you somewhere to bring together old pension pots from previous jobs, while your current workplace pension continues running separately.

One thing to check

Some workplace pensions have a feature called salary sacrifice, where your contributions are taken before tax and National Insurance. This is particularly tax-efficient and worth understanding before you decide how to split your contributions between the two.

The short version

Yes, you can have both. Most people with a SIPP also have a workplace pension running alongside it. Keep contributing to your workplace pension - especially if your employer matches - and use your SIPP for everything else.

This article is for educational purposes only and does not constitute financial advice. Always consider your personal circumstances before making investment decisions, and seek regulated financial advice if you need it.