Important: The information on this website is for experienced investors. It is not a personal recommendation to invest. If you’re unsure, please seek advice. Investments are for the long term. They are high risk and illiquid and can fall as well as rise in value: you could lose all the money you invest. Pension and tax rules may change, and benefits depend on your circumstances. Scottish tax bands and rates are different, and different benefits apply.
Why consider investing in Private Markets funds?
Private Markets are a broad class of investments that are not traded on public exchanges – such as the London Stock Exchange. They include Private Equity, Private Credit, Infrastructure and other Real Assets.
Investing in Private Markets funds can offer several compelling benefits to the right type of investor.
Three key reasons for experienced investors to consider investing in Private Markets
- Access to a broader opportunity set – more companies are choosing to stay private for longer, seeking capital from private sources rather than going public. Investing in Private Markets allows access to this vast universe of companies, from early-stage tech startups to established businesses, infrastructure projects, and real estate, many of which are leading innovation in critical sectors like AI and renewable energy.
- Portfolio diversification – since this huge pool of equity doesn’t move in lockstep with global stock indices, it could be an effective portfolio diversifier.
- Enhanced return potential – Private Markets have historically outperformed their public counterparts in the long term – past performance is not a guide to the future.
However, it is very important to note Private Market investments are high risk and illiquid and only for investors with sufficient knowledge, experience and assets to fall back on.
Free guide: Investing in Private Equity and Private Markets
Get your free guide and find out the main facts, explained clearly and briefly:
- How do Private Equity and Private Markets work?
- Why are they increasingly popular?
- How have they performed – in good times and bad?
- What are the main risks?
- Who could invest – and how?
Why consider investing in Private Markets funds through a SIPP?
Holding investments in a SIPP can offer significant tax advantages. You can transfer funds from most existing private pensions and SIPPs or make new contributions (you can read more on transfers below).
- Up to 45% income tax relief on contributions – SIPP contributions should receive a government top-up of 20% for basic-rate taxpayers, with higher and additional-rate taxpayers able to claim back up to an extra 20% or 25% respectively via their tax return.
- Tax-free growth – within a SIPP, investments grow free from UK income tax and capital gains tax (CGT), and you are usually able to withdraw up to 25% of your SIPP fund tax free at retirement, with the rest taxed as income.
Pension money can’t usually be taken out until at least 55 (rising to 57 in 2028) – this could tie in well with the long-term nature of Private Markets investments.
Currently, Wealth Club is working on making retirement options available. Whilst these are developed, investors wishing to access their SIPP will have to transfer it to a different provider first. If you are within a few years of retirement, please consider this before investing.
How to invest in our Private Markets SIPP?
Once you decide a Private Markets SIPP is for you (we can't advise you), you can apply online.
Head to our Private Markets platform, including Private Equity, Private Credit, Infrastructure and Secondaries funds from some of the world's leading asset managers – you will need to complete a simple online form to confirm you are a High Net Worth or Sophisticated Investor before getting access to full details on the funds.
For each fund, we have indicated if you can hold it in a SIPP. You can read a full impartial review, including strategy, case studies, track record, charges and risks, and apply online.
Please note: prior to completing the online application, you will be required to complete a few questions about your investment knowledge and experience, to check you qualify as an Elective Professional Client (EPC). Becoming an EPC involves giving up certain regulatory protections. You can preview the questions here.
How much can I invest in the Private Markets SIPP?
Each Private Markets fund has its own minimum investment – stated on the fund review page.
There is no maximum investment when transferring from an existing pension or SIPP.
If making a new SIPP contribution, this will have to comply with pension contribution rules and allowances (see below).
What are the main risks of Private Markets investments?
While all investments can lose money, Private Markets investments sit at the riskier end of the spectrum. Some of the main risks are below.
Capital risk – You should not invest capital you cannot afford to lose.
Market and strategy risk – Investments in Private Markets are sensitive to changes in the global economic outlook. An economic slowdown or a drop in investor confidence could have an impact on the value of the investment. Some funds use more complex strategies or even borrowing, which can boost gains but also make losses bigger. Make sure you understand how these approaches could impact your investment.
Liquidity risk – Private Markets investments are long term and not easily realisable, with no established or easy-to-access secondary market. Semi-liquid funds generally offer regular redemptions, usually capped as a percentage of NAV to manage liquidity. There may be restrictions, including penalties for early withdrawals or the power to suspend withdrawals during market stress.
Currency risk – Investments denominated in currencies other than the fund’s base currency expose it to the risk of exchange rate movements.
Valuation risk – It may be difficult to find appropriate pricing references and readily available information in respect of unlisted investments.
Due to the risks of Private Markets investments, it would be prudent for an experienced investor to allocate no more than a relatively small percentage of their total portfolio to this asset class.
Private Markets SIPP – your questions answered
How does pension tax relief work?
When you contribute to a SIPP, you should be eligible for pension tax relief: the more tax you pay (or owe), the more tax relief you could receive. Most UK residents under the age of 75 should qualify, although there are restrictions as to how much you can contribute.
20% basic-rate tax relief is added automatically: if you make a payment of £8,000 the government adds £2,000, so £10,000 is invested in your SIPP. It is the gross contribution that counts towards your annual allowance. The basic-rate tax relief payment normally takes up to 12 weeks to be credited to the SIPP.
Higher and additional-rate taxpayers can claim back more – up to a further £2,000 (20%) and £2,500 (25%) respectively via their tax return. So, a £10,000 pension contribution could effectively cost a higher-rate taxpayer as little as £6,000 and an additional-rate taxpayer as little as £5,500.
Note: Scottish taxpayers are subject to different rates of tax and can benefit from different levels of tax relief, although they will automatically receive the 20% basic rate relief.
Where will my Private Markets SIPP be invested?
Any funds you contribute or transfer to the Private Markets SIPP will be invested in your choice of Private Markets fund available on our platform.
What are the charges?
There are no additional charges for the Private Markets SIPP.
Please see each fund's review page for the Schedule of Charges, including details of the charges paid to Wealth Club, and the fund documents, including details of the fund charges and any early redemption penalties.
How much can I contribute tax efficiently to my SIPP?
The general rule is that UK residents aged under 75 can contribute tax efficiently up to as much as they earn to their SIPP each tax year, subject to an Annual Allowance.
The Annual Allowance is the maximum that can be contributed to one’s pensions in a tax year before incurring a tax charge. It is currently £60,000 gross for most people, and in some cases you can carry forward unused allowance from previous years, but there are three main exceptions.
1. Non-earners and non-taxpayers
You can make a payment of up to £2,880 each tax year, to which the government adds £720, to give a total SIPP contribution of £3,600.
2. Investors who have already taken cash from a pension using the pension freedoms
If you have taken cash from a pension (in one go or as smaller lump sums), the annual allowance is generally £10,000. This is called the ‘Money Purchase Annual Allowance' (MPAA). Once your annual allowance is reduced to £10,000, you won’t be able to carry forward any unused allowances from previous tax years. Download our Factsheet on the Money Purchase Annual Allowance »
3. Some higher earners
You may not be able to use the full £60,000 annual allowance and potentially be restricted to contributing as little as £10,000 a year.
This might affect people whose ‘adjusted income’ in the tax year exceeds £260,000.
Broadly speaking, adjusted income is any income – from employment, property, investments, etc – PLUS any employer pension contributions and those deducted from your gross pay LESS any taxed lump sums or death benefits.
If you are affected, your annual allowance for the tax year reduces by £1 for every £2 of adjusted income above £260,000. This is called the ‘tapered annual allowance’. If you have an adjusted income of £360,000 or more you will have an annual allowance of £10,000. Download our Factsheet on the Tapered Annual Allowance »
You should, however, be able to carry forward if you have any unused allowance from previous years. Download our Factsheet on Pension Carry Forward »
The rules around the tapered annual allowance are complex and this is only a summary. You can read more on the HMRC website. If in doubt, please seek specialist advice.
What is carry forward – and how does it work?
Carry forward could allow you to use any leftover allowance from the past three tax years to make a larger pension contribution (in excess of the standard annual allowance) in the current one.
To be able to carry forward, you must have had a pension in each year from which you are carrying forward (even if you didn’t contribute) and your earnings for the current tax year must be the same or greater than your pension contribution.
Broadly speaking, to calculate how much you can carry forward, you should look at the annual allowance you had, then subtract any contributions made into your pension in the current year and then in each of the last three tax years, starting with the earliest.
You cannot use carry forward if you have triggered the Money Purchase Annual Allowance.
Download our Factsheet on Pension Carry Forward »
This is a simplified explanation – for more details, including a carry forward calculator, please visit the HMRC website. If in doubt, please seek specialist advice.
What pensions can I transfer?
You can transfer most UK personal and stakeholder pensions, Retirement Annuity Contracts (RACs), and SIPPs.
We currently cannot accept transfers from pensions already in drawdown. Please let us know if you might be interested and we’ll let you know as soon as this becomes possible.
We cannot accept transfers from any pensions with Safeguarded Benefits. These are pensions with a defined benefit (DB) element, often connected to a ‘final salary’ scheme.
We cannot accept QROPS or occupational pension schemes, such as SSAS or AVCs.
You should contact us before transferring if any Orders apply to your pension, such as Earmarking, Pension Sharing or Trustee in Bankruptcy Orders.
How does a pension transfer work?
To start a transfer, you simply provide the details of the pension you wish to transfer (the whole fund or just a part) when you complete your application to invest in one of the Private Markets funds on our platform via a SIPP.
We will contact your existing provider and take care of the rest. There is no transfer-in fee.
Your pension will be transferred as cash and will be invested at the next available trade date – you will be out of the market whilst the transfer takes place. This could be several weeks or months, depending on the next available trade date.
Before transferring, you should check with your provider that you will not lose valuable benefits or guarantees nor incur penalties or excessive exit fees. If unsure, you should seek advice.
If you were born after 5 April 1971, you should also ask your provider if the pension you’re transferring will allow you to take benefits from age 55 after the minimum retirement age rises to 57 in 2028. If so, this right may be lost when the policy is transferred.
Due to the nature of the investments we offer, your provider may require you to book and attend a MoneyHelper “safeguarding” interview before transferring.
How much tax-free cash can I take from my SIPP?
Like all pensions, a SIPP is intended to provide for your retirement. The earliest you can take any money out – if you so wish – is currently age 55 (rising to 57 from 2028).
At that point, most investors should be entitled to take up to 25% of their SIPP as tax-free cash (this is technically called “Pension Commencement Lump Sum” or PCLS), usually subject to a monetary cap of £268,275 (Lump Sum Allowance or LSA, effective from 6 April 2024).
Lifetime Allowance changes: what could they mean for me?
The Lifetime Allowance, first introduced on 6 April 2006, previously set the limit of total value that could be built up in pensions without incurring a tax charge. It has been abolished from 6 April 2024.
This means there are no longer limits on how large a pension you can build tax efficiently, but new rules have been introduced on the tax treatment of lump sums taken from a pension. From 6 April 2024, a new Lump Sum Allowance (LSA) applies. It limits the tax-free cash you can get from your pension to £268,275. Meanwhile, a second new allowance, the Lump Sum and Death Benefit Allowance (LSDBA) – also effective from 6 April 2024 – limits the total amount of tax-free cash you can take in your lifetime and you can pass on when you die to £1,073,100, in most cases.
There are, as always, exceptions. When the Lifetime Allowance was first introduced and each time its level has reduced over the years, investors have had the opportunity to apply for various forms of Lifetime Allowance protection.
So, if you have in the past applied for a form of Lifetime Allowance protection (you should have a certificate from HMRC to this effect or can check via your online HMRC account), you might be able to take 25% or more of your pension as tax-free cash, even if the amount exceeds the £268,275 cap. If you have protection, it could be sensible to take advice before making any decisions that could impact it.
How could I take benefits from my SIPP/access my SIPP?
Currently, Wealth Club is working on making retirement options, including drawdown and lump sum options, available through our service. Whilst these are developed, investors wishing to access their SIPP would have to transfer it to a different provider first.
What happens to my SIPP when I die?
Your nominated beneficiaries can then decide whether to take it as a lump sum, take a flexible income – or no income – from it (drawdown) or use it to buy an annuity. As part of the application process, we will ask you to nominate your beneficiaries. This is simply to express your wishes and is not binding: it can be changed by you at any time.
If you die before your 75th birthday, your beneficiaries should be able to inherit your SIPP free of income tax, provided it is passed on (the technical term is “designated”) within two years of your death. Note: the Lump Sum and Death Benefit Allowance (LSDBA) may apply, limiting the total amount of tax-free cash you can take in your lifetime and you can pass on when you die to £1,073,100, in most cases.
If you die after your 75th birthday, your beneficiaries will normally have to pay income tax at their highest marginal rate on whatever they take out, either as income or lump sum.
Please note: the tax treatment is different if the beneficiary is not an individual or you leave your pension to charity.
IMPORTANT: from 6 April 2027 unused pensions will be included in someone’s estate on death and potentially liable to IHT.