Rewritten Text A Self-Invested Personal Pension (SIPP) offers excellent tax benefits and investment flexibility that makes it an effective retirement savings tool. Despite these advantages many people are not putting away enough money for a comfortable retirement.
The Office for National Statistics Wealth & Assets Survey shows that the typical 47-year-old has only £27,000 in their pension pot when excluding those with defined benefit schemes. The good news is there is still time to improve this situation.
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HMRC Tax Change 2026: Personal Allowance Rule Shift Expected to Impact Millions of Households
A window of opportunity remains open Legal & General research indicates that people in their 40s and 50s still have a chance to transform their retirement outlook. This applies even to those who have not yet begun saving. The possibilities are worth examining in detail.
Please note that tax treatment varies based on individual circumstances and may change over time. This article provides information only & does not constitute tax advice. Readers should conduct their own research & seek professional guidance before making investment decisions.
Don’t give up
Starting late does not mean failure Legal & General research shows that 9 million people aged 25 to 54 are not currently saving enough for an adequate retirement. However this does not mean the situation is hopeless. Their analysis demonstrates that a 47-year-old starting from zero could accumulate £116,000 over twenty years. This calculation assumes contributing 8% of the UK average salary and achieving a real annual investment growth rate of 4.1% after inflation. After twenty years this person would also qualify for the State Pension.
What this means in practical terms Predicting
the future is impossible but current figures provide useful guidance. Someone with a complete National Insurance contribution record currently receives a State Pension of £11,973 annually. A person holding a £116,000 SIPP invested in dividend shares yielding 6% could generate an additional £6,960. Combined this produces an annual income of £18933. This represents a reasonable outcome for someone who only began serious saving in their late 40s
Conservative growth projections
AJ Bell could benefit if more people take charge of their retirement planning. Although the company sold its pensions business a year ago it continues offering SIPP access to clients. The share price has increased 197% since the December 2018 listing. This equals over 16% annually and suggests Legal & General’s 4.1% growth assumption is quite conservative. The current dividend yield stands at 3% although future dividends cannot be guaranteed. The company benefits from operating in an industry with high entry barriers. New competitors would struggle to quickly achieve the necessary scale for profitability. Building a robust investment platform requires substantial capital investment.
Risks to consider Some risks exist for the business
AI-powered alternatives could reduce income from its fee-generating advice services. The company also operates in a heavily regulated market where violations can result in significant fines. Despite these challenges the company is currently managing them successfully. Platform business customer numbers grew 21% to 673000 in 2025. Assets under administration increased 21% to £108 billion. Recent global stock market turbulence likely generated increased trading activity which should produce a strong start to 2026. AJ Bell represents a stock worth considering whether as part of a SIPP or a general investment portfolio.
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