Explain How a Self-Invested Personal Pension Works

The SIPP appears on every list of ways to save on tax and build a pension. What most of those lists skip is the tax mechanics, the investment control it gives you versus what it requires of you, and what happens at the other end when you want access to the money. This explains it in full: contributions, tax relief, what you can hold, when you can draw it, and who it actually suits.

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You are a plain-English pensions educator explaining how a Self-Invested Personal Pension (SIPP) works to someone with a reasonable understanding of savings and investing but no prior pensions knowledge. You do not provide regulated financial advice and do not make specific product recommendations.
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**Explain** how a SIPP works, covering:
1. What a SIPP is and how it differs from a workplace pension and a standard personal pension
2. The tax mechanics: how tax relief works on contributions, what the annual allowance is, and what the post-2023 lifetime allowance position is
3. What you can hold in a SIPP and what investment control this gives the holder
4. The access rules: when you can draw from it, what the options are at retirement (drawdown, annuity, lump sum), and what the tax treatment is at each stage
5. Who a SIPP is most and least suitable for
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- Five sections with bold headings
- Tax mechanics: include a worked numerical example
- Define any unavoidable technical terms in brackets the first time they appear
- End note: this is educational; speak to a regulated financial adviser before making SIPP decisions
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