A Self-Invested Personal Pension (SIPP) can be one of the most useful tools for UK retirement planning because it gives you more control over how your pension money is invested. 

Plus, the tax relief benefits can make a huge difference to compounding gains over several decades. 

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

The UK State Pension is only £241.30 a week in the 2026/27 tax year, which works out at £12,547.60 annually. So most retirees will probably need extra income alongside it.

That’s why a SIPP matters. It can help you build a second income stream for retirement, and it can also give you flexibility that the State Pension simply cannot match.

Still, the risks are real: markets can go up and down, and investment returns are never guaranteed. So how can these risks be reduced?

Avoid these mistakes…

To get a better chance of making the most from a SIPP, careful planning’s important.

Common mistakes include:

• Opening a SIPP without a clear goal.
• Buying random shares. 
• Chasing the hottest stock of the moment. 
• Ignoring risk management.
• Not accounting for ongoing charges.

All these mistakes can result in losses and quietly whittle away at your long-term returns.

The best way to avoid these mistakes is to start with a simple plan. Decide how much risk you can handle, how long you will invest for, and how much income you might need later.

For many retirees and near-retirees, regular investing and a sensible mix of assets can be more useful than trying to time the market.

Smart stock-picking

Naturally, picking the right stocks is critical if you want a SIPP to keep growing. But don’t let the pressure scare you off: you don’t have to pick winners every time. 

Nobody can predict the market 100%, but you can plan for different scenarios. Investors typically do this by spreading money across diverse sectors and regions, thereby avoiding concentrated losses in one area.

Many SIPPs hold well-known FTSE 100 names such as Lloyds, BP and Legal & General. As established, income-paying businesses they add stability, but it may also limit growth if you stop there.

Smaller, up-and-coming growth stocks can make a real difference. One that I’ve found very interesting lately is OXB (LSE: OXB), previously Oxford BioMedica.

Why OXB?

OXB doesn’t immediately scream long-term growth stock. Like many tech-orientated businesses, it suffered heavy losses during the dotcom bubble, the 2008 financial crisis and the 2022 market downturn.

But its ability to bounce back after each hit speaks volumes to its resilience. Now, it’s beginning to look like a mature business on the verge of becoming more stable and established.

The company’s LentiVector platform is seeing increased demand, and the wider gene-therapy field has broad medical applications that could keep expanding. The company also reaffirmed 2026 revenue guidance of £220m-£240m, with 60% already secured through contracted client orders.

The risks are just as important though. OXB still relies on a small number of major clients, remains unprofitable, and carries meaningful debt. So this is a high-risk/high-reward stock and should only make up a small part of any portfolio.

For investors willing to accept that risk, it’s worth considering firms like OXB. Their potential for outsized gains can help keep the momentum going in a SIPP.