Pensions and Retirement
Best Funds for a SIPP: 4 Global Trackers, 0.12% to 0.24%
Asking which are the best funds for a SIPP usually means asking the wrong question first. A SIPP is a tax wrapper, not a portfolio, and the pension it eventually pays is determined far more by how much you contribute and how little you pay in charges than by which of four broadly similar global trackers you pick. That said, the four below are the funds most long-term SIPP investors actually end up in, and the differences between them are real and worth understanding. All charges quoted are ongoing charges figures (OCFs) checked in August 2026. This is information, not personal advice.
Why a global tracker is the usual answer
A SIPP is money you cannot touch until 57 from April 2028, or 55 before then. That is a long horizon, and long horizons favour broad equity exposure with the cost dragged as low as possible. Every 0.1% of annual charge you avoid compounds for decades alongside the returns.
The case against picking individual funds by past performance is well covered on our active versus passive investing page. The short version is that the fund that beat the market over the last five years is not reliably the fund that beats it over the next five, whereas the fund that costs 0.12% instead of 0.85% reliably keeps 0.73% more of whatever the market delivers.
The four funds, and what actually separates them
| Fund | OCF | What it holds | The trade-off |
|---|---|---|---|
| Fidelity Index World P Acc | 0.12% | MSCI World, developed markets only | Cheapest, but no emerging markets |
| HSBC FTSE All-World Index C Acc | 0.13% | FTSE All-World, developed plus emerging large and mid cap | Broadest equity coverage per pound of charge |
| Vanguard FTSE Global All Cap Index | 0.23% | Developed, emerging and small caps | Most complete, twice the charge of Fidelity |
| Vanguard LifeStrategy 80% Equity | 0.20% | 80% equities, 20% bonds, multi-asset | Bonds built in, but a heavy UK weighting |
Fidelity Index World is the cheapest of the four at 0.12% with no initial charge, and it tracks the MSCI World Index. The thing to know is what that index excludes: it is developed markets only, so no China, India, Taiwan, Brazil or South Africa. That is not automatically a flaw. It is a deliberate choice to skip roughly a tenth of the global market, and plenty of investors make it knowingly.
HSBC FTSE All-World Index costs 0.13% and tracks the FTSE All-World, which includes emerging market large and mid caps alongside developed markets. For one basis point more than Fidelity you get materially broader coverage, which is why it is the default recommendation on most UK forums. Fund code GB00BMJJJF91 for the C accumulation class.
Vanguard FTSE Global All Cap at 0.23% adds small companies to the mix, so it holds the widest slice of the investable world of the three equity funds. Whether the extra ten basis points buys anything is genuinely arguable. Small caps have a long-run theoretical premium and a poor recent decade, and the fund is roughly twice the cost of Fidelity for a difference of a few per cent of portfolio weight.
Vanguard LifeStrategy 80% Equity at 0.20% is a different animal: a multi-asset fund holding roughly 80% shares and 20% bonds, rebalanced for you. It is the pick for someone who wants one line item and no decisions. The point everybody should check before buying it is the UK weighting. On the current allocation, UK All Share sits at about 16.7% of the fund, several times the UK’s share of global markets. If you work in the UK, own a UK home and will draw a UK state pension, that is a lot of additional UK exposure. Our LifeStrategy review goes through it in detail.
There is also the Vanguard Target Retirement range, all at 0.24%, which does the same job as LifeStrategy but automatically shifts from shares into bonds as your chosen retirement year approaches. It is the most hands-off option available in a UK SIPP, and the price of that is a fixed glidepath you do not control.
The charge that costs you more than the fund
Fund OCF is only half of what you pay. The platform charge on top is often larger, especially on a big pot. Vanguard’s own SIPP, for instance, charges 0.15% capped at £375 a year on top of the fund OCF, and percentage-based platform fees with no cap become the dominant cost once a SIPP passes six figures.
The practical consequence: a saver with £300,000 choosing between a 0.12% and a 0.23% fund is arguing over £330 a year, while a saver on an uncapped 0.45% platform is paying £1,350 for administration. Fix the platform first. Our SIPP fees compared page has the arithmetic, and best SIPP providers covers who charges what.
How many funds do you need in a SIPP?
One is a defensible answer. A global tracker already holds thousands of companies across dozens of countries, and adding a second global fund mostly duplicates the first. The common mistakes are owning three funds that hold the same US mega caps and calling it diversification, or bolting a US technology fund onto a global tracker that is already 60-odd per cent United States.
If you want to add anything, the honest candidates are bonds, for the volatility reduction as you approach retirement, and possibly a small allocation to something genuinely different. Our page on how many index funds you need makes the case for keeping it to one or two.
What changes as retirement gets closer
The reason to hold 100% equities in a SIPP at 35 is that you have thirty years to recover from a crash. That reason disappears in stages. By the time you are within about ten years of drawing on the pot, a fall of a third at the wrong moment stops being a buying opportunity and starts being a permanent reduction in your income.
There are three ways to handle it, and they are all reasonable:
- Hold a single-asset global tracker and shift a slice into bonds or cash manually as you approach the date.
- Hold a multi-asset fund such as LifeStrategy and step down the equity percentage when you rebalance, moving from 80 to 60 to 40.
- Hold a target-date fund and let the glidepath do it, at 0.24% and with no decisions from you.
What you should not do is leave a pot you will draw on next year fully in equities because it has worked so far. How you take the money then becomes the next question, covered in drawdown versus annuity.
The allowances that govern what you can put in
For the 2026/27 tax year:
- Annual allowance: £60,000, covering your contributions, employer contributions and any defined benefit accrual. Unused allowance can be carried forward from the previous three tax years.
- Relief at source: 20% added automatically by the provider. Higher and additional rate taxpayers claim the rest through Self Assessment.
- Non-earners: £3,600 gross, meaning £2,880 paid in and £720 added, even with no relevant earnings.
- Money purchase annual allowance: £10,000, which replaces the £60,000 once you have flexibly accessed a defined contribution pension. It cannot be topped up with carry forward, so taking taxable income from a pot early can cost you a great deal of future allowance.
- Lump sum allowance: £268,275, the cap on tax-free cash across all your pensions since the lifetime allowance was abolished in April 2024.
Full detail on the relief mechanics is on our pension tax relief page, and the official rules are on GOV.UK.
The order that actually matters
- Contribute enough to get every penny of employer match in a workplace scheme first. That is an instant return no fund can match.
- Choose a platform whose charging structure suits your pot size.
- Pick one broad global fund and pay as little as possible for it.
- Increase contributions when your pay rises.
- Leave it alone.
Fund selection is step three of five, and it is the step people spend ninety per cent of their attention on. The gap between the cheapest and dearest fund here is 0.12 percentage points a year. The gap between contributing 8% and 12% of salary is a different retirement.
Frequently asked questions
What is the best fund for a SIPP? For most long-term investors, a single broad global equity tracker. HSBC FTSE All-World at 0.13% gives the widest coverage per pound of charge, Fidelity Index World is cheaper at 0.12% but excludes emerging markets, and Vanguard FTSE Global All Cap at 0.23% adds small companies. There is no single right answer, only trade-offs between cost and coverage.
Is one fund enough in a SIPP? Yes, for many people. A global tracker holds thousands of companies across developed and, depending on the index, emerging markets. Adding a second global fund usually duplicates the first rather than diversifying it. Bonds are the main genuinely different asset worth adding, and mostly as retirement approaches.
Should I choose LifeStrategy or a global tracker in a SIPP? LifeStrategy at 0.20% includes bonds and rebalances for you, which suits someone who wants one holding and no decisions. The trade-off is a UK equity weighting of roughly 16.7%, far above the UK’s share of world markets. A global tracker gives you global weights but leaves the bond decision to you.
How much can I pay into a SIPP in 2026/27? The annual allowance is £60,000 including employer contributions, and you can carry forward unused allowance from the previous three tax years. If you have flexibly accessed a defined contribution pension, the money purchase annual allowance of £10,000 applies instead and cannot be carried forward.
Do fund charges or platform charges matter more? On a large pot, usually the platform. The difference between a 0.12% and a 0.23% fund on £300,000 is about £330 a year, while an uncapped percentage platform fee at 0.45% on the same pot is £1,350. Sort the platform before agonising over ten basis points of fund charge.
Can I hold ETFs instead of funds in a SIPP? Yes, on most SIPP platforms, and the cheapest global ETFs are broadly comparable in cost to the cheapest funds. The difference is mechanical: ETFs trade intraday and may carry dealing charges and a bid-offer spread, while index funds price once a day and usually trade free. Our index funds versus ETFs page covers which suits regular monthly contributions.
