Many SIPPs will allow you to invest in UK equities (including investment trusts, Aim shares and ETFs), gilts, bonds, regulated unit trusts and Oeics.

Billy Mackay, marketing director of AJ Bell, said you will generally also be able to invest in shares in recognised overseas stock markets (NYSE, NASDAQ, CAC to name but a few).

Some SIPPs will also allow investment in things like commercial property, insurance company bonds and a variety of bank accounts.

Any investment restrictions will usually be set at individual product level, rather than on the basis of what the government allows SIPPs to invest in, Mr Mackay added.

For example, he said there isn’t a government rule that stops you from investing directly into overseas commercial property, but advisers will find there are a number of Sipp administrators who will not allow this in their product.

In terms of things to look out for, Mr Mackay said there are certain types of assets that will result in tax charges.

The best known are direct investment in residential property and holiday lets.

Mr Mackay said you also need to be wary of directly investing in tangible assets like fine wine or works of art.

He said: “Investment in these types of assets will lead to very significant tax consequences on the client and the pension scheme.”

Mary Stewart, director of Hornbuckle Mitchell, said there is no reason to pay for unnecessary features but there also needs to be an element of crystal-ball gazing to ensure a SIPP is not only suitable now, but will remain so in the future.

She said some providers offer both basic and bespoke versions, allowing easy transfers if the members’ needs change.

Ms Stewart said: “Does the provider have expertise in specialist areas needed, particularly important in the case of non-standard asset classes?

“Finally, look for a transparent fee menu that safeguards against nasty surprises later on.”

Source : FT Advisor

By Emma Ann Hughes