Yes, you can have a SIPP and a workplace pension at the same time. UK law places no cap on the number of registered pension schemes one person can belong to, and paying into both is a common way to combine employer contributions with wider investment choice. The constraint that matters is not how many pensions you hold but how much goes into them: across every scheme combined, the annual allowance is £60,000, and your contributions, your employer’s contributions, and tax relief all count toward that single figure.
No Legal Limit on How Many Pensions You Can Hold
Nothing in UK pension law restricts how many registered schemes you can belong to. You can stay in your employer’s auto-enrolment scheme, open a SIPP, keep deferred pensions from previous jobs, and run more than one SIPP if you want to. Each scheme is registered independently with HMRC, and the tax rules apply to you as an individual across all of them rather than to any single account.
Your workplace pension and a SIPP are not in competition. The workplace scheme keeps collecting employer contributions, while the SIPP gives you control over where the money is invested. Treating them as complementary is the right starting point.
Why Running Both Usually Beats Picking One
A workplace pension comes with employer money attached. Under auto-enrolment, your employer must pay a minimum of 3% of qualifying earnings, and total minimum contributions (yours and theirs) must reach at least 8%.1GOV.UK. Analysis of Automatic Enrolment Saving Levels Opting out to fund a SIPP instead means walking away from those employer payments, and no investment return reliably makes up for that.
A SIPP fills a different gap. Most workplace schemes offer a limited menu of funds chosen by the employer or scheme trustee. A SIPP opens up individual stocks, investment trusts, exchange-traded funds, commercial property, and a wider range of assets. If you want more control, broader diversification, or access to cheaper index funds than your workplace scheme carries, a SIPP works as an add-on rather than a replacement.
A practical approach: contribute enough to your workplace pension to capture the full employer match, then route additional savings into a SIPP where you pick the investments.
The £60,000 Annual Allowance Covers Everything Combined
The annual allowance is the total amount that can go into all your pension schemes in a tax year before a tax charge applies. Since the 2023/24 tax year, that figure has been £60,000.2Legislation.gov.uk. Finance Act 2004, Section 228 – Annual Allowance It covers your personal contributions, your employer’s contributions, and the basic-rate tax relief the government adds. The £60,000 is per person, not per account, so splitting contributions between a workplace pension and a SIPP does not create extra room.
Exceed the allowance and you face an annual allowance charge on the excess, calculated at your marginal income tax rate, which effectively claws back the tax relief on the amount over the limit.3Legislation.gov.uk. Finance Act 2004, Section 227 – Annual Allowance Charge This is where holding more than one pension demands attention. It is easy to lose sight of a combined total when contributions flow in from different sources on different schedules.
Tapered Allowance for High Earners
If your adjusted income exceeds £260,000, the annual allowance tapers down. For every £2 of adjusted income above that threshold, your allowance drops by £1, with a floor of £10,000.4GOV.UK. Tax on Your Private Pension Contributions – Annual Allowance Adjusted income includes salary, bonuses, benefits in kind, and your employer’s pension contributions, so the threshold can catch people who do not think of themselves as top earners. The taper does not apply where threshold income (broadly, taxable income before pension contributions) is £200,000 or less.
Money Purchase Annual Allowance
Once you start flexibly accessing a defined contribution pension, through drawdown or an uncrystallised funds pension lump sum, the money purchase annual allowance applies. It cuts the amount you can contribute to defined contribution pensions to £10,000 a year.5GOV.UK. Pension Schemes Rates This catches people who start drawing pension income early but keep working and paying into a SIPP.
Tax Relief Works Differently in Each
You can get tax relief on personal contributions up to 100% of your relevant UK earnings, or £3,600 if that is higher, which matters for non-earners or very low earners.6GOV.UK. Tax on Your Private Pension Contributions – Tax Relief How you receive that relief depends on the scheme.
Most workplace pensions use a net pay arrangement. Your contribution comes out of salary before income tax is calculated, so full relief lands in your pay packet automatically, regardless of your tax band.
SIPPs typically use relief at source. You pay from post-tax income, and the provider claims basic-rate relief (20%) from HMRC and adds it to your pot. Pay £800 in and the provider claims £200, giving a £1,000 gross contribution. Higher-rate (40%) and additional-rate (45%) taxpayers only get the 20% automatically. The extra relief has to be claimed through self-assessment, and it is the step people most often miss.6GOV.UK. Tax on Your Private Pension Contributions – Tax Relief
Employer contributions sit outside the 100%-of-earnings limit for personal relief, but they still count toward the £60,000 annual allowance.
Carry Forward If You Want to Pay in More
Unused annual allowance from any of the previous three tax years can be carried forward and used in the current year, letting you exceed £60,000 in a single year without a tax charge. It is useful after a large bonus, inheritance, or business sale.4GOV.UK. Tax on Your Private Pension Contributions – Annual Allowance
Two conditions apply. You must have been a member of a registered pension scheme in the year you want to carry forward from (a dormant workplace pension from a previous job counts). And you must use the current year’s £60,000 first, then draw on carried-forward amounts starting with the oldest year. Keeping contribution records from all your schemes for the past three years is the only way to work out your real headroom.
Lump Sum Allowances Apply Across All Your Pensions
The lifetime allowance, which previously capped the combined value of your pensions at £1,073,100 before extra tax applied, was abolished on 6 April 2024.7GOV.UK. Abolition of Lifetime Allowance – Amendment of Power to Make Further Regulations There is no longer a ceiling on the total size of your combined pots. New limits took its place, controlling how much you can withdraw tax-free.
The lump sum allowance caps total tax-free pension lump sums at £268,275 across your lifetime. A separate lump sum and death benefit allowance of £1,073,100 covers certain circumstances including serious ill-health lump sums and some death benefits.8GOV.UK. Tax on Your Private Pension Contributions – Lump Sum Allowance These limits apply across all your pensions combined, so taking a tax-free lump sum from the workplace pension reduces what you can later draw tax-free from the SIPP.
Opening a SIPP Alongside a Workplace Pension
Opening a SIPP does not require your employer’s involvement or permission. You will need your National Insurance number, date of birth, bank details, and a figure for how much you plan to pay in.9GOV.UK. Information Requirements for Pension Schemes – The Basics Check a recent payslip for your current workplace pension contributions, so you can see how much annual allowance remains before you commit to a monthly amount.
Most providers operate online. You apply, verify your identity, and fund the account by bank transfer or direct debit. After your first payment, the provider claims basic-rate tax relief from HMRC and adds it to your pot. If you are a higher-rate or additional-rate taxpayer, remember the extra relief has to come through your tax return; it does not appear in the SIPP automatically.