Is there any point having a SIPP and a Stocks and Shares ISA?

A Self-Invested Personal Pension (SIPP) is a great way of taking control of your own retirement planning. And with the option of being able to invest in a wide variety of asset classes, it provides plenty of flexibility.

However, more people own a Stocks and Shares ISA. So is there a reason why someone would hold both? Let’s investigate.

A quick comparison

The fundamental difference between the two products is that you can’t touch a SIPP until retirement age whereas it’s possible to access an ISA at any time. This makes the former an effective way of saving for old age as it removes the temptation to withdraw funds for other purposes.

But holding both gives greater flexibility should you need to access some emergency funds. That’s the principal reason why I have one of each. However, there are other differences.

With a SIPP, it’s possible to contribute up to 100% of annual income, subject to a maximum of £60,000. There’s a £20,000 annual contribution limit with a Stocks and Shares ISA.

Both offer some great tax benefits. Capital gains and income can be earned tax-free. However, in addition, contributions to a SIPP attract tax relief.

If in doubt as to which is best, I think it’s worth seeking professional advice.

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.

A common goal

But whether an individual has a SIPP, an ISA, or both, the objective of building long-term wealth remains the same.

For example, someone investing £250 a month at an annual return of 7% would see their fund grow to £294,016 over 30 years. This ignores any tax relief that would be received with a SIPP.

One of mine

A stock that I hold in my SIPP is Burberry Group (LSE:BRBY).

The luxury fashion group saw its share price slump as post-pandemic inflation and interest rate rises choked off demand. But I think there are early signs that the group’s fortunes could be on the turn. Crucially, its last three collections have been well received by journalists and industry professionals.

And the group’s most recent trading update – for the 13 weeks ended 27 December 2025 – showed a 1% increase in retail revenue compared to a year earlier. Comparable store sales were up 3%. For the second successive quarter, all regions were flat or positive.

This might not sound particularly impressive but it shows an improving trend and is evidence that its ‘Burberry Forward’ turnaround strategy, with its emphasis on the group’s ‘Britishness’ and outerwear, is working. Greater China, a key market, showed 6% like-for-like sales growth compared to 3% during the previous quarter.

We will know more on 14 May, when the group plans to publish its full-year results.

A long-term play

Recent events in the Middle East have severely dented Burberry’s share price. However, assuming the war ends soon, I believe this is a buying opportunity to consider. Yes, the conflict’s a reminder of how another global slowdown would badly affect the group. And a further round of US tariffs would also be unfortunate.

But appropriately for a brand that’s been around since 1856, I plan on holding my Burberry shares for the long term. I believe the group has huge recovery potential although I suspect the stock’s likely to be a bit of a slow burner rather than an overnight sensation.

The post Is there any point having a SIPP and a Stocks and Shares ISA? appeared first on The Motley Fool UK.

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James Beard has positions in Burberry Group Plc. The Motley Fool UK has recommended Burberry Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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