Self-invested personal pensions (SIPPs) offer great flexibility and are about to become very popular as a result of the changes to pension legislation from April 2006.

More and more people, no longer satisfied to leave their retirement nest eggs in the hands of underperforming fund managers, are switching to DIY personal pensions.

Self-invested personal pensions (SIPPs) offer far greater flexibility than ordinary personal and occupational pensions because you can have many types of investment in them, including British and foreign stocks, unit trusts, investments trusts, managed life funds, unit-linked funds, and even commercial property. From April the range of potential investments is almost unlimited, including, for example, residential property, wine and antiques.

This allows you to spread the risk of products or providers performing badly. If you are unhappy with the performance of your ordinary personal-pension provider, switching to another provider is simply not cost-effective in the early years because charges are often loaded on to the first years' contributions. You are effectively forced to freeze your pension and start up another one with another provider, incurring more set-up costs.

SIPPs give you the freedom to switch out of poorly performing investments. They also offer the potential for much better returns, because you can adopt a more aggressive investment strategy than large pension funds. And yet they get the same tax relief as ordinary personal pensions.

You can also draw an income from the fund without having to retire or take an annuity. Investors are also realising the benefit of selling shares in their portfolio, making gains within the annual capital-gains tax (CGT) limit, and then buying the shares back within a SIPP to get the tax relief on the way in. When we tell our clients about the flexibility of SIPPs many of our clients wonder why they haven't been told about them before.