ii SIPP Index
The ii SIPP Index reveals how interactive investor SIPP pension savers invest during their working life and in retirement
The ii SIPP Index Q4 2024 - Q1 2025
Our latest iteration of the SIPP Index, covering Q4 2024 and Q1 2025 is out now. The SIPP index looks at investment trends and behaviour in accumulation and drawdown.
The pension landscape has continued to evolve over the two years since we’ve tracked our SIPP customer data. With a pensions review currently underway and pensions set to be included in inheritance tax calculations from April 2027, this index provides unique insight into how SIPP customers are currently investing and positioning their pension portfolios during their working life, when they are accumulating wealth, and in retirement once they are in drawdown.
Key findings:
- Passive funds take the lead as the most popular funds for customers in both accumulation and decumulation for the first time.
- Allocation to ETFs increased by 2% between Q1 2024 to Q1 2025 for those in accumulation.
- Cash balances increased 0.7% for those in accumulation compared to Q3 2024, as customers responded to market volatility.
- Likewise, money market funds continued to surge in popularity, climbing to the 3rd most popular fund for customers in decumulation.
- SIPP customers are waiting until their mid-sixties to start drawing on their pension.
- Among older SIPP customers, those over 55, women slightly outperformed – with women in drawdown enjoying 17.36% returns over 2 years, versus 16.77% for men.
Craig Rickman, Pensions Expert, interactive investor, discusses the top holdings for SIPP customers:
Accounting for almost 40% of total holdings, funds are the preferred choice for SIPP investors in both accumulation and drawdown. This is understandable given the huge popularity of Vanguard’s LifeStrategy range - a mainstay of interactive investor’s top 10 most bought list. The appeal here is that investors can access thousands of funds and fixed interest instruments around the globe to align with their favoured risk appetite in a one-stop shop.
Since Q1 2022, there are some notable trends to observe concerning how investors are tinkering with their SIPP holdings. One thing that stands out is the increased allocation to ETFs at the expense of investment trusts. Appetite for investment trusts has waned in recent years, and our data illustrates this is the case for investors across the board. By contrast, allocations to ETFs have surged with SIPP investors wooed by their simplicity and low costs.
Something else that catches the eye is the increased cash holdings since Q3 2024. Drawdown investors beefed up cash allocations by around 10%, signaling concerns about the short-term trajectory of markets.
Accumulation investors also upped their cash weightings, suggesting those who took this approach probably fell into one of two camps. They either sold out of winners and kept their powder dry to seize stock buying opportunities should they arise (which indeed came to pass in early April) or wanted some extra cushion from potential near-term downsides.
The continued popularity of gilts, captured under ‘other’ assets, provides further evidence of investors taking a more defensive and diversified stance. As gilts are bonds backed by the government, they can provide much-treasured security and certainty during rockier periods. Increased coverage of the role gilts can play in portfolio construction means investors are better informed and have subsequently become savvier.
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