Dip into a Sipp

With all the problems surrounding pensions at the moment, have you ever considered a bit of do-it-yourself?

A self-invested personal pension - or Sipp - means you can decide where your money goes.

They're not suitable for everyone but at least you are in control.

And you could be better off - a leading pension adviser reckons Sipps are giving better returns than a common or garden stakeholder.

So exactly what can you put into a Sipp?

Shares

Unit trusts

Endowments

Bank deposit accounts

Commercial property.

But there are certain things that you can't include:

Unquoted shares

Residential property

Art and antiques.

For its exercise, pension advice firm Hargreaves Lansdown presumed that Sipp investments had been made in a selection of unit trusts.

It wanted to see how Sipps compared to stakeholders, the government's low-cost pension scheme launched two-and-a-half years ago.

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Hargreaves Lansdown found that in the past year, the Sipp would have increased by 20% compared to the stakeholder's 10%.

And although the market has performed badly since the stakeholder was set up, in that time it would have lost twice as much value as the Sipp.

In the past, Sipps have been considered suitable only for wealthier people, especially as the charges have been high.

"The costs on Sipps have come down a great deal," says Tom McPhail of Hargreaves Lansdown.

"The gap between stakeholders and Sipps in terms of charges has narrowed considerably in the last couple of years."

He agrees that the stakeholder has its place but believes actively managing your own pension can bring good returns.

"For a lot of people a stakeholder is really the most convenient and most sensible answer, particularly where you're joining a stakeholder scheme through your employer," says Tom.

"For people who are prepared to spend a little time doing some research and prepared to monitor their investment, they can do better through a self-invested pension and through using unit trusts.

"You can invest in a Sipp with as little as £100 a month now, so they really are quiite accessible."

But whichever option you choose, he stresses that the biggest problem most people face is that they are simply not putting enough money into their pension funds.