My plan for kick-starting my pension is to set up a Self Invested Pension Plan and buy some ftse 100 Exchange Traded Funds (iShares, probably).

This is only the starting point, the simplest thing that works, as we say, but I will diversify further at a later point.

I have my own very small company through which I sell my consultancy services. I am approaching fifty years old (I have pension pots from previous employments).

What could possibly go wrong? What are the potential pitfalls?

2 Answers 2


Well, the potential problem is that the FTSE 100 could go down, or just not up. Really, it's as simple as that. After all, why diversify if the FTSE 100 will only go up?

So, the question is, why wait to diversify? Why not add in the Gilt ETF for a little government bond exposure? Why not a Corp. bond ETF? Maybe a little of that Global ex-UK for a little foreign stock exposure?

That said, saving is better than not saving, so if starting it off with just the FTSE 100 gets you saving, go for it.


SIPPs tend to have relatively high fees, so if you stick with simple stuff and never use the freedom to invest widely, you might be wasting money. At least an element of the fees tends to be a fixed amount rather than a percentage, so generally you also need a few tens of thousands of pounds to put in before they make sense.

One thing that worries me slightly about SIPPs (I have one myself) is the fraud risk: what if a corrupt employee of the trustee company runs off with my money? I'm not sure that there's any compensation scheme that would cover that situation.

If any of your old pension pots are in defined benefit schemes rather than money purchase, you should probably leave those ones where they are.

Other than that I don't see any pitfalls.

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