SIPP users have less than a month to use their full investment allowance for this year. The deadline is 5 April, the final day of the tax year. For many of us, any unused portion of this allowance will be lost forever.
Users can invest up to £60,000 in a SIPP each year or 100% of their annual earnings, whichever is lower. This includes total contributions from them and their employer, as well as tax relief. Any unused allowances from the prior three years can be moved forwards, though this won’t help investors who have already maxed out their allocation.
SIPP users only need to deposit cash in their account to secure the annual allowance. They don’t actually need to purchase any shares, funds, or trusts straight off the bat. But with the London stock market being packed with bargains right now, why wait?
Sage Group (LSE:SGE) is one top cheap share to consider from the FTSE 100. What makes the software giant a top contender this SIPP season?
A beaten-down giant
Sage Group is one of the FTSE 100’s worst performing shares over the last year. It’s slumped 31% in value, reflecting worries over potential artificial intelligence (AI) disruption. Investors are questioning why people would pay for its software-as-a-service (SaaS) offerings when they can do it cheaper and potentially easier with AI.
But have these fears been overblown? Possibly, though only time will tell. The rapid pace of AI development means no-one can confidently predict the outcome, and I’m not about to start!
Too cheap to miss?
That said, there are reasons to believe the market may have overreacted. And at current prices, I think Sage shares are worth close attention. They trade on a forward price-to-earnings (P/E) ratio of 18.8, well below the 10-year average of 31-32.
That’s not the only thing that’s caught my eye. City analysts expect Sage’s earnings growth to explode to 122% in 2026, leaving the FTSE firm on a P/E-to-growth (PEG) ratio of 0.9 as well. Any reading below 1 suggests a share that’s trading below value.
Seizing the AI opportunity
Not having proper accounting, payroll, and HR systems in place can cause enormous operational disruption and potential legal problems. Will companies want to risk this with AI? I’m not so sure, and especially as the cost benefit of switching from Sage would likely be negligible.
Sage is actually investing large sums in its own AI capabilities to capitalise on growing user interest here, and is integrating AI more deeply into its standard software. Last year it introduced its Sage Copilot tool that automates routine tasks and monitors data to identify errors.
It’s also moving more closely to agentic AI that can complete multi-step tasks autonomously. Its AI Developer Solutions will launch in November to allows partners to build custom models directly inside Sage products.
So are Sage shares a buy? While they’re not without risk, I think they’re worth a close look from SIPP investors at current prices.
