Which feature distinguishes a SIPP from a standard personal pension?

• A. It restricts investments to government bonds only.
• B. It is only available in the UK to employers.
• C. It guarantees a minimum return.
• D. It allows wider investment choice and personal control.

Answer: (D)

The main idea here is flexibility and control over investments. A SIPP lets you choose a much wider range of investments and manage your own asset mix, giving you direct control over your retirement portfolio. You can typically invest in individual stocks and shares, investment funds, ETFs, investment trusts, corporate bonds, and even commercial property within HMRC rules. In contrast, a standard personal pension usually offers a more limited selection managed by the provider. There is no guaranteed minimum return with a SIPP; returns depend on how the investments perform. The broader investment choice and personal control are what distinguish SIPPs from standard personal pensions, though this flexibility comes with more responsibility for selecting and monitoring investments. The other statements aren’t correct: investments aren’t restricted to government bonds, SIPPs aren’t available only in the UK to employers, and they don’t guarantee a minimum return.