Are two pensions better than one: benefitting from both a SIPP and a workplace pension?
05 May 2026
Many people remain unsure about how pensions can work together. Recent research highlights the confusion: only 39% of respondents correctly believe you can contribute to both a Self-Invested Personal Pension (SIPP) and a workplace pension at the same time, while 25% admit they have no idea how the two interact. When asked how many SIPPs someone can hold, 43% said they were unsure, and only 17% recognised that individuals can have multiple pensions if they wish.
This uncertainty raises an important question: are two types of personal pensions better than one? The answer depends on your individual circumstances, but it’s a good idea to understand each type on its own and how they work together.
What is a workplace pension?
A workplace pension is a scheme arranged by your employer to help you save for retirement. Typically, three different parties make the contributions: you, your employer and the government through tax relief. Since the introduction of automatic enrolment in October 2012, most employees are now contributing to one.
Workplace pensions are designed to be simple and effective. Contributions are usually taken directly from your salary, and your employer will often match or exceed your own payments up to a certain level. Over time, this combination can provide a strong foundation for long-term retirement savings.
It is important, however, to keep track of these pensions as you move jobs as a new one will begin in each workplace. If you’re in this situation, it’s important to consider consolidating your workplace pensions to merge multiple pots into one, which makes it easier to manage, reduces admin, and potentially lowers fees.
Tax Treatment
Tax Treatment
The tax treatment depends on the individual circumstances of each client and may be subject to change in the future.
What is a SIPP?
A SIPP is a type of personal pension that offers greater control over how your money is invested. Unlike most workplace schemes, which tend to offer a limited range of funds, a SIPP allows access to a much broader universe of investments, including shares, funds and bonds.
For many investors, opening a SIPP also provides an opportunity to consolidate pensions from previous employers, making it easier to manage retirement savings in one place. It can be particularly appealing to those who want to take a more active role in shaping their investment strategy.
Key differences
In addition, SIPPs provide significantly wider investment choice, whereas with workplace pensions you are generally limited to a handful of funds.
Can you have both?
Yes, you can have both a workplace pension and a SIPP, yet just 39% of people are aware of this. In fact, combining the two can be an effective method foryour retirement planning.
Many contribute enough to their workplace pension to take full advantage of their employer’s contributions, essentially making the most of what is often described as “free money”. At the same time, a SIPP can be used to supplement these retirement savings and offer greater choice and flexibility over additional contributions.
However, it is important to be mindful of the rules. Total contributions across all your pensions count towards your annual allowance, and tax relief applies based on your individual circumstances.
Contribution rules, limits and tax relief
For most people, the annual pension contribution allowance is currently £60,000, although this may be lower for higher earners due to tapering. This limit applies to the total contributions made across all pensions in a tax year, including those from your employer.
Pension contributions benefit from tax relief, effectively providing a government top-up. This makes pensions one of the most tax-efficient ways to save for retirement. However, exceeding your allowance can result in a tax charge, so careful planning is essential.
When would it make sense for someone to have multiple pensions?
Having both a workplace pension and a SIPP can be advantageous in several scenarios. For example, it allows you to maximise employer contributions while also building a more tailored investment portfolio through a SIPP.
A SIPP may also be useful for consolidating old pensions, reducing administrative complexity and giving a clearer view of your overall retirement savings. For more experienced investors, the flexibility to choose specific investments can be particularly valuable.
Tax Treatment
Tax Treatment
The tax treatment depends on the individual circumstances of each client and may be subject to change in the future.
Should I have a SIPP if you are self-employed?
For those who are self-employed, a workplace pension is not typically available. In this case, a SIPP often becomes the primary retirement savings vehicle, offering both flexibility and control over contributions and investments.
When it might be unnecessary for me to have multiple pensions?
If your workplace pension already meets your needs and you prefer a more hands-off approach, adding a SIPP could introduce unnecessary complexity.
What option is right for you?
Ultimately, it is not necessarily about having more pensions, but about having the most tax-efficient and correct strategy to meet your retirement needs. Combining a workplace pension with a SIPP can offer greater flexibility and potentially enhance long-term outcomes, but it is not necessary for everyone.
What matters most is making informed decisions based on your individual circumstances. Taking the time to understand your options, and seeking professional advice can help ensure your pension strategy is working as hard as it can for your future.
The research was conducted by Censuswide, among a sample of 2000 UK respondents (nat rep 18+). The data was collected between 18.03.2026 - 20.03.2026. Censuswide is a member of the Market Research Society (MRS) and the British Polling Council (BPC), and a signatory of the Global Data Quality Pledge.
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