Understanding the importance of diversification

Markets can move unpredictably. One asset class might be soaring while another is falling. Diversification ensures you’re not overly reliant on a single investment or sector to meet your financial goals.

For example, if your portfolio is made up entirely of tech stocks, a downturn in the tech industry could cause a sharp drop in your portfolio. But if you also own bonds, commodities, and shares in other industries, those assets may hold steady or even rise, helping cushion the blow.

Diversification doesn’t guarantee profits, but it can make the investing journey less bumpy by balancing the ups and downs.

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Diversification strategies in investing

There are many ways to diversify a portfolio. Investors often combine several of the following approaches:

• Asset classes: such as stocks, bonds, real estate, commodities, or cash equivalents.
• Industries and sectors: spreading across technology, healthcare, finance, consumer goods, and more.
• Market capitalisations: investing in both large, stable companies (blue chips) and smaller, growth-focused firms.
• Risk profiles: mixing higher-risk, higher-return assets with safer, lower-yield options.
• Tangibility: balancing between traditional financial assets and physical assets like property or gold.
  

The right mix depends on your goals, time horizon, and risk tolerance.

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Advantages of diversification

• Could reduce the risk of heavy losses from one sector.
• Could provide protection against market fluctuations.
• Could help investors achieve steadier long-term growth. 
• Offers exposure to different markets and opportunities. 

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Disadvantages of diversification

• Can limit short-term gains if one area performs very well.
• More complex and time-consuming to manage.
• May involve higher costs or fees, especially if spread out across platforms. 
• Can feel overwhelming for new investors looking for a simpler approach. 

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How to assess portfolio diversification

Holding several different investments doesn’t guarantee your portfolio is diverse, the weighting of each investment matters too.

For example, holding ten different stocks might look diverse, but if they’re all in the same industry, you’re still exposed to the same risks.

One way to assess diversification is by looking at how much of your portfolio is concentrated in one asset class, sector, or company. Tools and portfolio trackers can help you see where your money is spread and identify any gaps or imbalances.

See our full guide on portfolio management.

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Diversification summary

Diversification is one of the simplest yet most effective ways to manage risk in investing. By spreading your money across different asset types, industries, and markets, you can give yourself a smoother journey towards your long-term goals.

Next in this series: How to rebalance your portfolio, why it matters and how to adjust your investments to stay on track.

What is the Prize Savings Account? 

Our Prize Savings Account is an instant access savings account, where instead of earning interest, your cash deposits give you entries into a monthly draw to win tax-free¹ prizes paid directly into your account.

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Is it free to enter?

Yes! Entries are completely free of charge, all you need to do to enter is deposit and hold an average balance of at least £100 at the end of the month. 

Note - from 1 December 2025 onwards you will only need to hold a minimum average balance of £10. 

Every £10 of average balance gives you one entry in the monthly draw.

But to be clear; entries don’t cost you anything, and any money that you deposit can be instantly withdrawn whenever you want (but note that you will lose entries in the monthly draw).

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Is it a normal instant access savings account?

The Prize Savings Account is an instant access savings account with instant deposits and withdrawals.

It is powered by our partner bank ClearBank, and all deposits are ultimately held by them and covered by the Financial Services Compensation Scheme (FSCS) up to £120,000 (see our ‘how we protect your money’ webpage to learn more about FSCS at Chip). 

The only difference between the Prize Savings Account and any other savings account is that instead of earning interest, you will have a chance to win tax-free¹ prizes.

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How much can I save?

The maximum amount of cash you can save into the Prize Savings Account is £85,000. Any prizes won are paid as ‘bonus’ and are paid directly into your Prize Savings Account, and don’t count towards the £85,000 balance limit. 

It is not possible to deposit more than this amount, or to open multiple accounts in order to do so. Any attempt by an individual to open multiple accounts would result in a breach of the Prize Savings Account terms and conditions.

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What are the prizes?

All prizes are tax-free¹ sums of ‘bonus money’ we pay directly to your Prize Savings Account.

The prize amounts can change each month and we’ll publish next month’s prizes on this site no later than five calendar days before the start of the next draw. 

We commit to always paying at least one Grand Prize of £10,000 and 250 ‘additional prizes’ of £10. Though, generally we pay much more than this!

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What’re the odds of winning?

We can’t be exact with the odds of the next draw, as it depends on how many people enter and how many prizes are awarded. But we can share past odds. Please also note that you can win more than one prize per draw.

The odds of winning per entry (per £10 deposit) in the September 2025 draw were:

• 1 in 623 to win any prize

The average odds of winning per entry (per £10 deposit) in all 2025 draws were:

• 1 in 964 to win any prize

Data is based on January - September 2025.

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Are prizes tax free?

All prizes are tax-free sums of ‘bonus money’ we pay directly to your Prize Savings Account.

But note that Chip does not provide tax advice, and tax treatment depends on individual circumstances and may be subject to change in the future.

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‍Can I win more than one Prize? 

Yes you can. You can win multiple tax-free prizes in the draw. 

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When are the prizes paid?

If you win an ‘additional prize’, it will be added to your Prize Savings Account within five working days after the start of the month (but we aim to do this as close to the 1st of the month as we can). 

If you win the Grand Prize, we will contact you before it is paid (see below).

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What happens when you win the Grand Prize?

Grand Prize Winners need to confirm their win before the prize is paid. 

We will contact you by email and call you. You’ll have seen the recordings of these calls on our social media accounts. 

We will also ask you to take part in reasonable publicity, like being interviewed and filmed. We will obtain your express consent before filming and/or sharing any media. 

Winners have 10 working days to respond to us and claim their prize (we reach out by email, push notification and phone, leaving voicemails and even SMS).

If we can’t reach the Grand Prize winner, the prize will be deemed forfeit and the amount will be added to the following month’s prizes (i.e. like a ‘rollover’). 

For example, if a winner wins a Grand Prize of £10,000 in January but does not claim it, the Grand Prize available in February’s draw (for this example, also £10,000) would become the value of both January and February’s Grand Prizes combined (i.e £20,000).

Rest assured, we make every effort to contact the Grand Prize winner and we haven’t had a single Grand Prize unclaimed yet!

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How are the prizes awarded?

Prizes are paid as a bonus, not cash, directly into your Prize Savings Account.  

Please note, the prizes do not become cash until your full Prize Savings Account balance is withdrawn back to your current account, or if you transfer your balance to another account in Chip. Also note, when withdrawing prizes to your linked bank account, this can take up to five working days.

Prizes also do not count towards additional entries, unless you withdraw and redeposit. Prizes are not FSCS protected until they are withdrawn and redeposited.

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How do you enter?

Each month you will be entered into the prize draw provided you have an average balance of £10 or above in the Prize Savings Account (and have not opted out).

Every full £10 of average balance = one entry. 

The average balance you have on 11:59pm on the last day of the calendar month is what gets counted as your entries.

For example, if you have an average balance of £10 on 11:59pm on the last day of the calendar month you’d get 1 entries each calendar month (unless you opt out).  

If your average balance drops below £10, and remains at that level at the end of the calendar month, you’d have 0 entries in that month’s prize draw (if you choose to opt out of the draw, you’ll have 0 entries, regardless of your balance).

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How does average balance work?

Before we get into the detail of how average balance works, the important things to take away are:

• The earlier you deposit in the month the more entries you get.
• In the month after you deposit, every £10 of your balance = one entry in the draw (provided you don’t withdraw).
• Use the calculator to see how many entries you’ll get.

Your average balance is calculated by your daily balance divided by the number of days in the month. 

When are my entries counted?

Your entries will be taken at the end of the calendar month, but the draw will take place in the first week of the following month (no later than five working days after the end of the calendar month). 

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Where can I see my entries?

You can see your entries in your app, on the Savings tab under “Prize Savings Account” 

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Can I get extra entries?

You can occasionally earn extra entries through promotional offers. You might be able to double your entries, or earn entries for completing actions like referring a friend.

These are one-off promotions and will have their own eligibility and terms and conditions. Extra entries can count above the deposit cap of £85,000 (8,500 entries)

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How and when are the winners picked?

The draw will take place within five working days after entries close (the first five working days of the following month). Winners are selected using randomised draw software. 

The Grand Prize winner will be paid within 5 working days of them accepting the prize (see above), and we aim to pay ‘additional prize’ winners within the same timeframe, but it’s normally much quicker.

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Can I autosave into this account?

Yes, you can autosave directly into this account (Savings Plans settings can be found on the profile tab) and also deposit one-off amounts at any time by selecting the Prize Savings Account in the Savings tab and tapping ‘deposit’. Saves into this account also count toward your in-app savings goals that you can set up in the ‘Goals’ tab.

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Is this gambling or a lottery? Can I lose money?

The Prize Savings Account is not a lottery or gambling and it’s completely free to enter. You can’t lose money. You are depositing money in a FSCS protected account for the chance to win prizes. You can withdraw for free at any time.

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Can I open a Prize Saving Account for my child?

Unfortunately not, The Prize Savings Account is only available to the named individual who must be a UK resident over 18 years of age.

How do Stock Markets Work?

Stock markets are essentially auction houses for shares. Companies list shares to raise money – this is called an Initial Public Offering (IPO), and investors can then buy and sell those shares with each other on an exchange.

Prices change in real-time, depending on how many people want to buy or sell a stock. 

The major stock exchanges (like the NYSE or London Stock Exchange) have set opening hours and are highly regulated to try and ensure trading is fair and transparent.

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How do Stocks Work?

When you buy a stock, you’re buying a small piece of a company – a share in its ownership. If the company performs well and becomes more valuable, so do your shares – and you! 

You can also earn money through dividends, which are portions of the company’s profits paid out to shareholders. 

Of course, the value of stocks can go down too. If the business performs poorly or market conditions shift, your investment can lose value. More information about how stocks work.

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Understanding the Stock Market

The stock market isn’t a singular place where all stocks are traded –  it’s made up of lots of exchanges, sectors, industries, and regions. Tech, healthcare, energy, retail all react differently depending on the economy, news and investor sentiment.

That’s why most investors don’t just pick one stock and hope for the best. Instead, they build a diversified portfolio to spread their risk (more on that in the next section). Learn about investment portfolio management.

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Why does the Stock Market go up and down?

In short: confidence and expectation. When investors are optimistic about a company or the economy, they tend to buy, which pushes prices up. When uncertainty hits (interest rate hikes, political instability, global events, natural disasters), investors might panic and sell, which drives prices down.

These ups and downs are part of the deal when you’re investing. They’re known as market fluctuations or volatility.

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What is Market Volatility?

Volatility refers to how much – and how quickly – the price of an investment changes. High volatility means big up and down price swings. Low volatility means steadier, more predictable price movements.

Volatility is normal and often driven by short-term news, but it doesn’t always reflect the long-term value of a company. That’s why many investors focus on time in the market rather than trying to time it perfectly.

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Global Stock Market Indices

Market indices track the performance of a specific group of companies, giving you a snapshot of how that part of the market is doing. Some of the most well-known include:

• FTSE 100 – Top 100 companies listed in the UK
  
  
• S&P 500 – 500 of the biggest companies in the US
  
  
• Nasdaq – Primarily tech companies in the US
  
  
• Nikkei 225 – Major companies listed in Japan
  
  

You can’t invest in an index directly, but you can invest in index funds or ETFs that aim to track them, which is a great way to get broad market exposure. What are asset classes?

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How to Invest in the Stock Market?

You can access the stock market through an investment platform or app (like Chip), and typically you’ll invest via one of the following:

• Stocks & Shares ISA – for tax-efficient investing
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• General Investment Account (GIA) – flexible, no contribution limits

You can invest in popular stock market indices by investing in index funds that track their performance directly, such as the S&P 500, FTSE 100 and the Nasdaq.  

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Investment Portfolio Management

Once you’ve got to grips with the basics of the stock market, and the different asset classes available to invest in, you’ll want to figure out the type of investment portfolio management style to suit you. 

The next guide in our series takes you through the options in more detail. 

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Seccl Custody Limited is the ISA Manager for the Chip Stocks and Shares ISA. Fund management charges apply. ISA limits apply. Invest £20k per tax year. Chip does not provide tax advice or financial advice. Tax treatment depends on individual circumstances and may be subject to change in the future. GIA proceeds are potentially taxable, subject to any annual exemption that may apply. 

Why retirement planning matters

Saving alone often isn’t enough. Rising living costs, longer lifespans, and inflation can eat into the value of your savings over time.

Investing helps your money grow faster than inflation — giving you a better chance of reaching your retirement goals.

Starting early means your investments have more time to grow through compound returns. Even modest monthly contributions can snowball into a chunky retirement pot if you begin in your 20s or 30s.

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What is long-term investing?

Long-term investing generally refers to committing your money for 10 years or more, often with retirement as the goal. It’s less about picking stocks and more about staying the course and letting time do the heavy lifting.

By sticking with your investments long-term, you’ll be able to see the effects of compounding (snowballing returns).

Short-term volatility will matter less, and you’ll be less tempted to make impulsive decisions, because you have a plan in place. 

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Common investment options for retirement

Pensions (State & Private)

• State Pension: In the UK, this provides a basic income from age 66+, but for most people, it’s not enough to live on alone.
  
• Workplace Pension: You and your employer contribute to help boost your retirement savings. You’ll get tax relief, and this is an opt-out scheme so if you meet the requirements, this will build automatically.
  
• Private Pension (SIPP): You invest the money yourself, and you’ll still get tax relief. Offers more control and choice over where your money is invested. Generally, employers won’t contribute outside of a workplace pension so this could be a better option to supplement your workplace pension.

Chip does not currently provide these types of investment products.

Index funds and ETFs

Using low-cost, diversified funds that track a broad market index, can be a great vehicle for retirement investing. More information about what ETFs are.

As the holdings of these funds are adjusted in line with market movements, it can be a great passive option, as you don’t have to choose stocks yourself. 

Other ETFs can also offer great diversity, but make sure you’re aware of the holdings, and make sure you aren’t over exposed to one particular sector or market, as any downturns might have a bigger effect on your retirement portfolio. 

Learn about different investment types and asset classes.

Target-date retirement funds (TDF)

Target-date retirement funds automatically adjust the weighting of a portfolio as the investors retirement date approaches.

Weightings shift from higher risk assets such as stocks to lower risk assets like bonds, in line with the funds roadmap. 

The main benefit of using a TDF is the professional management. The ‘glidepath’ or roadmap of the fund is carefully designed to map out an investment journey that mitigates against overexposure to risk, but also seeks to significantly outpace inflation. 

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How much should you invest for retirement?

There’s no one set path for budgeting for your investments, but there are a few popular rules you can follow to keep yourself on track each month:

• The 50/30/20 rule is a simple budgeting technique that ensures each month you can take care of the essentials, like rent and bills (50%), enjoy the things you love (30%), and pay something towards your future with saving or investing (20%). Full guide here.
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• The 25x rule or 4% rule helps you calculate the total amount of money you should aim to save before retiring. Multiplying your yearly retirement expenses by 25 assumes you’ll be covered, withdrawing 4% of your invested portfolio each year to sustainably cover living costs. 

These are a couple of options that can help, but everyone’s situation is unique, so it can be good to play around with calculators to help you.

A Monte-Carlo simulator allows you to input your investment asset allocation and details of your investing timeline, providing you with a series of outcomes.

No portfolio path is binary, and viewing the variety of possible outcomes and their probability, can help you ground your expectations. 

Starting early will always give you the best chance of reaching your retirement goals, and in some cases you may be able to beat your retirement target.

Starting in your 20s is ideal as you can comfortably invest little and often, but it’s not too late for you if you’re starting in your 30s, or even 40s. 

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Strategies for long-term investing success

Stick to the following principles, and you can build a long-term, passive investment strategy that you can have confidence in:

• Start early, stay consistent. Even small amounts compound over time
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• Automate your contributions. Remove friction and emotion
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• Diversify your portfolio. Reduce risk and improve stability
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• Reinvest dividends or choose accumulating assets. Accelerate growth through compounding
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• Avoid market timing. Focus on time in the market, not timing it
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• Review and rebalance annually. Adjust as life goals and risk tolerance evolve

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Mistakes to avoid when investing for retirement

Keep the following in mind when investing with retirement as your goal:

• Starting too late. Start as soon as you can, even small amounts can make a big difference
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• Taking on too much or too little risk. Make sure your asset allocation is right for where you are in your investment journey
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• Not accounting for inflation. Remember to account for the effect of inflation when tracking your required retirement pot
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• Cashing out early (highlight penalties or lost growth). There are tax implications for taking your pension early, and you might miss out on potential growth. Stick to your plan
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• Ignoring fees and charges. Fees compound in the same way returns do, so don’t pay more than you need to

Learn more about behavioral investing and common mistakes.

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Ethical and thematic investing

The investing landscape is shifting. Ethical and thematic investing is growing in popularity, as more investors week to align their portfolio with their own values. 

Our next guide will go into what ethical and thematic investing are, the different types, how they work and how to get started. 

We’re going to take a moment to comment on how events in the Middle East have impacted financial markets. This is a constantly evolving situation, so what you read here reflects the situation as of 12:00 GMT 13 March 2026. 

Before we start: What this could mean for your day-to-day 

Here’s a quick summary of the headlines that outline some of the knock-on effects of what a prolonged conflict might mean. ‍

The fuel & bills effect: Regional tension spikes oil prices, which is important, as it's a direct link to higher costs at the petrol pump and potentially stickier energy bills at home. (This Is Money)

Shopping basket surcharge: Rerouting ships to avoid hotspots adds weeks to journeys and millions to freight costs. This eventually makes everything from electronics to your weekly food shop more expensive. (Retail Gazette)

Mortgage & interest rate link: If costs stay high, inflation becomes harder to "kill off." This makes the Bank of England less likely to cut interest rates, meaning those cheaper mortgage deals could stay out of reach for longer. (BBC)

When conflict erupts, and geopolitical events intensify, the reaction can be swift. Institutional investors try to assess potential impacts on global trade, energy prices, and broader economic stability. That uncertainty can lead to short-term volatility.

Energy markets tend to be particularly sensitive to developments in the region because of the Middle East’s importance to global oil supply.¹ Even the possibility of disruption can influence prices and investor sentiment, and because energy affects all walks of life, the reaction is global.

As a result, stock markets have seen fluctuations over the last 12 days, reflecting a familiar pattern: geopolitical news triggering short bursts of market movement.

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Why markets often react this way

Financial markets are forward-looking and like certainty. When unforeseen events occur, whether it’s conflicts, elections, or diplomatic developments, this can make the economic outlook suddenly unpredictable.

In the short term, this presents itself as volatility in our investments.

But historically, markets tend to process these events relatively quickly. Once the immediate uncertainty fades or events become clearer, investors usually shift their attention back to economic fundamentals like corporate earnings, growth forecasts, and central bank policy.²

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Volatility is part of the investing journey

While it can feel unsettling, volatility is a completely normal part of investing.

Even in strong market years, markets regularly experience temporary dips or fluctuations. These moments often reflect the market adjusting to new information, such as shifting interest rate forecasts, unexpected corporate earnings reports, or sudden geopolitical developments like we’ve seen this week.

Importantly, many geopolitical shocks in the past have caused short-term market reactions but had limited long-term impact on global equities.³

For long-term investors, these periods are simply part of the journey.

Keeping perspective as an investor

When headlines dominate the news cycle, it can be tempting to react quickly. But long-term investing usually benefits from staying focused on the bigger picture.

Market history shows that reacting to short-term volatility can sometimes do more harm than good. Instead, many investors focus on maintaining a diversified portfolio and continuing to invest consistently over time.⁴

This approach helps smooth out the ups and downs that naturally occur in markets.

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Final thought

While global events can influence markets in the short term, long-term investing is about staying committed to your goals, through both calm and uncertainty.

Ultimately, your portfolio should be centred on the future, not the news cycle. By staying consistent and zooming out, you’re ensuring that when the dust settles, your long-term financial plan is still on track.

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Sources:

¹International Energy Agency (IEA) ²Vanguard ³J.P. Morgan ⁴Fidelity

What is an employee pension contribution? 

An employee contribution is the money taken from your salary to fund your pension. Depending on how your company runs its scheme, this is usually taken in one of two ways:

• Net pay: Taken from your gross salary before tax is deducted. You get full tax relief immediately (because you don’t pay income tax on that chunk of earnings). 
• Relief at source: Taken from your net pay after tax. The pension provider then claims the basic rate tax back from the government and adds it to your pot. 

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How much should I contribute to my pension? 

While auto-enrolment rules set a legal minimum, relying solely on this may not be enough for a comfortable retirement income. Financial experts sometimes suggest two strategies to set your contribution level.

Pension contribution percentages (‘half your age’ rule) 

A widely cited rule of thumb for ‘comfortable’ retirement savings is the ‘half your age’ rule.

1. Take the age you start contributing
2. Half it
3. Match total contributions to that number as a percentage until you retire

For example:

• Starting at 22? Aim for 11% total contributions
• Starting at 30? Aim for 15% total contributions
• Starting at 40? Aim for 20% total contributions

Note: Total contributions are your contributions, your employers and tax relief.

Maximising employer matching contributions 

Many employers offer a ‘matching contribution’. For example, if you increase your contributions from 5% to 7%, the employer will also contribute 7%.

If your employer offers this and you are able to make this extra contribution, maximising it ensures you receive the highest possible contribution from your employer.

Make sure if you are able to make the extra contributions, you’re claiming the maximum amount your employer will match.

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What is an employer pension contribution? 

An employer contribution is money from your employer paid into your pension. It does not come out of your salary; it’s an extra cost to the business, on top of your wages.

Because this money is paid directly into a pension, it is not liable for Income Tax or National Insurance contributions at the point of payment, making it a highly tax-efficient way to be paid.

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How much does my employer contribute to my pension? 

Your employer must contribute to your pension if you are an eligible worker. You must meet the following criteria:

• Be between age 22 and State Pension age. 
• Earn at least £10,000 a year.
• Ordinarily work in the UK. 

The amount they pay is dictated by Automatic Enrolment rules.

Note: Even if you don't meet the criteria for automatic enrolment, you may still be able to join your employer's pension scheme voluntarily. If you earn between £6,240 and £10,000 a year, or are aged 16–21 or above State Pension age, you have the right to opt in, and your employer will still be required to contribute. 

Auto-enrolment thresholds

The government sets total minimum contribution rates for employers and employees, which are currently 8% of your ‘qualifying earnings’ (between £6,240 and £50,270).

This 8% is usually split as follows:

• 3% from the employer (the legal minimum they must pay). 
• 5% pay contributions from the employee (the amount you must pay to make up the difference).

Opting out means losing your employer's 3% contribution entirely, effectively a reduction in your overall pay.". 

Read our full guide on workplace pensions.

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Pensions tax, relief and thresholds

Now we’ve covered your contributions, it’s important to understand how the government treats that money once it’s in your pension.

A pension is one of the few places you can earn money without immediate taxation. A key benefit of a pension is tax relief, where the government adds money to your pot.

However, the generosity isn’t unlimited, and there are strict thresholds on how much you can save; and how much tax-free cash you can take as a lump sum.

Read our next guide to understand the limits you need to watch out for.

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Interest rates and inflation are closely linked in the UK economy. Inflation, measured by the Consumer Price Index (CPI) and the Retail Price Index (RPI), is the rate at which the prices of services and goods are rising.

The Bank of England (BoE) is responsible for setting the base rate to help control inflation and maintain price stability.

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What Causes Inflation?

When the BoE raises interest rates, borrowing becomes more expensive. This can slow down economic growth and curb inflation. This is because higher interest rates make it more expensive for businesses to borrow money, which leads to slower growth and fewer job opportunities. 

Consumers also have less money to spend because they are paying more interest on loans and mortgages. As a result, demand for goods and services decreases, which can lead to lower prices.

On the other hand, when the BoE lowers interest rates, borrowing becomes cheaper. This can help stimulate economic growth and fuel inflation. When interest rates become lower, it makes it cheaper for businesses to borrow money, which can lead to more investment and create more jobs. 

Consumers also have more money to spend because they are paying less on loans and mortgages. This means the demand for goods and services increases, which can lead to higher prices. 

Learn more about interest rates here.

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How Does the Bank of England Control Inflation and Interest Rates?

The Bank of England uses monetary policy to control inflation and interest rates. The bank sets interest rates, which influence the cost of borrowing and the rate of growth in the money supply.

• When inflation is too high, the bank raises interest rates to reduce spending and slow down the economy.
• When inflation is too low, the bank lowers interest rates to encourage spending and growth.

The bank also uses other tools, such as quantitative easing, to influence the money supply and control inflation.

Quantitative easing (QE) is a monetary policy used by central banks to stimulate the economy by increasing the money supply and lowering interest rates.

This is typically done by purchasing government bonds or other financial assets from banks, which increases the banks' reserves and makes it easier for them to lend money.

The goal of QE is to encourage spending and investment, which can help boost economic growth and reduce unemployment.

This can help to stimulate economic growth and curb inflation by making it cheaper for businesses and consumers to borrow money.

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What You Need To Remember

When interest rates are high, borrowing becomes more expensive and can slow down economic growth whilst curbing inflation. When interest rates are low, borrowing becomes cheaper and can stimulate economic growth. 

Learn more about how our instant access savings account.

We’re delighted to give Chip members free access to a curated selection of insightful articles from the Financial Times (commonly abbreviated to the FT). 

These articles will only be available to read in the Chip app, making this an exclusive benefit to our members. 

They’ll be refreshed every week with new relevant articles being added as the markets and news cycle moves. 

We’ll be slowly rolling this out over the coming weeks, so keep your eyes open for the first articles appearing in your app. 

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World-class financial journalism in Chip

The FT has a strong reputation for writing world-class financial content stretching back over 100 years.

They’re widely recognised as one of the world’s most influential financial newspapers, with hundreds of journalists, editors and experts generating fact-checked content, covering everything the economy touches. 

So in short, we feel we’re bringing our members the very best financial content we can find. 

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Bringing valuable insight to Chip members 

As much as we're giving our members free access to a selection of the FT’s content (which is usually behind a paywall) for their enjoyment, this is to help them make informed decisions. 

Ultimately we want to give our members access to the insight and knowledge needed to make wise choices about their wealth and investments, by leveraging the expert insight and analysis from the FT’s team. 

So with this in mind, rather than simply bringing you breaking news from the FT, we’ll be focusing on:

• Opinion pieces
• Long reads covering economic trends 
• Market insights and breaking news
• Personal finance and lifestyle stories

We hope this can help you build an informed picture about what to do with your wealth by serving a balanced mix of thought-provoking topics on the economy and markets as explained by experts.

But as we always say, we’re building Chip for you, with you. So, don’t hesitate to get in touch if you have any thoughts about articles we should add. 

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Putting editorial content at the heart of Chip

The FT content is going to be just one part of reimagining our investment product. 

You’ll notice the investments tab adding increasing amounts of editorial content and insight that better explain what the available investments are, where they fit in your portfolio, and what’s in them. 

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Just note, your capital is at risk when you invest.

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What is a SIPP?  

A SIPP is a private pension ‘wrapper’ that gives you flexibility over both your investments choices and how you manage old pensions. With a SIPP, you can:

• Consolidate: Combine old workplace pensions that you no longer contribute to and may not be working for you into a single account. Read our full guide on pension consolidation.‍
• Invest with control: Get full visibility and control over your investments within your pension.

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How does a SIPP work?  

A SIPP works in a similar way to other defined contribution pensions, but with added flexibility and often a wider range of investment choices. It functions like a tax-efficient retirement savings account. You contribute, and the government tops your contributions up with tax relief.

• Tax relief bonus: If you pay in £80, the government adds £20 in basic-rate tax relief to make your total contribution to£100. Higher and additional rate taxpayers can claim extra relief.
• Investments: Your contributions are then invested into your chosen assets with the aim of growing your money.‍
• Tax-efficient growth: As long as investments are held inside the SIPP, you pay no Capital Gains Tax or Income tax on any growth generated in the pension.

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How to set up a SIPP  

Setting up a SIPP is simple:

1. Choose a provider: Look for a provider that offers clear fees and an investment offering that’s right for your retirement goals and level of experience.
2. Fund your account: You can transfer your old pensions, set up monthly recurring contributions, or pay in a lump sum.‍
3. Stick to your strategy: Choose investments that align with your goals and risk appetite. Some SIPPs require you to choose individual stocks, while many also offer ready-made solutions such as Target Date Funds. These funds automatically shift from higher risk to lower risk investments as you approach retirement.

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Can I have a SIPP and a workplace pension? 

Yes, you can have both at the same time. A common strategy used is to keep current workplace pensions to benefit from employer's contributions, but use a SIPP to consolidate all previous workplace pensions that are no longer being paid into.

Having a SIPP with those old pensions generally makes it easier to keep track of where each old pot is and more control on how it is invested

Read our full guide on workplace pensions.

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How many SIPPs can I have? 

Savers are not limited by the number of SIPPs they can hold. However, some people find it easier to keep everything in one place. Having a single SIPP can make it easier to get a better picture of retirement wealth and can often reduce the fees paid.

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How much can I pay into a SIPP? 

The two main limits you need to be aware of when paying into a SIPP are:

• The earnings limit: You can usually only receive tax relief on personal contributions up to 100% of your relevant UK earnings each tax year. For example, if you earn £30,000, you cannot personally contribute more than £30,000 and still receive tax relief
• The annual allowance: There is also a total cap of £60,000 per tax year (or 100% of your earnings, whichever is lower). This allowance includes all contributions - from you, your employer, and the government’s tax relief. 

Read our full guide on pensions tax, relief and allowances.

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What age can I draw my private pension? 

The trade-off for the tax benefits of a SIPP is that your money is locked away until a set minimum age.

• Currently you can access your SIPP from age 55.
• From 2028 this will rise to age 57.

Once you reach this age you’ll have the options to:

• take 25% of the pot as a tax-free lump sum, 
• buy an annuity (guaranteed income plan), or;
• leave the rest invested and withdraw the cash as you need (drawdown).
  

We’ll come back to each of these three scenarios later. 

Read our full guide on retirement ages.

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The State Pension

Whilst your workplace pension and SIPP help serve as your tools for building your personal retirement pot, you may also be entitled to the State Pension, provided you meet the qualifying criteria. This serves as a guaranteed foundation to your retirement income, with the amount you receive based on your National Insurance record. 

In the next guide we’ll cover how the State Pension system works, and what you can expect to receive if you qualify.