A Self-invested Personal Pension (SIPP) can be a great tool for long-term wealth building. The big advantage over a Stocks and Shares ISA is the tax relief on contributions, which can give your money a stronger start and more time to grow.
But a SIPP also comes with a trade-off: since the money’s locked away until retirement, stock picking requires more care than it would in an ISA.
That’s why many SIPP investors lean towards familiar, blue-chip companies on the FTSE 100 and S&P 500.
Common SIPP holdings
| Stock | Market cap | 10-year price growth | Cont. dividend payments (yrs) |
|---|---|---|---|
| Shell | £198.91bn | +111% | 33 |
| GSK | £85.69bn | +51% | 41 |
| Lloyds | £57.29bn | +45% | 12 |
| BP | £90.87bn | +71% | 44 |
| Barclays | £56.02bn | +175% | 42 |
| HSBC | £218.71bn | +195% | 42 |
| Diageo | £30.94bn | -25% | 42 |
| Imperial Brands | £23.95bn | -20% | 29 |
| Nvidia | $4.31trn | +20,000% | 14 |
| Tesla | $1.35trn | +2,149% | 0 |
| Meta | $1.26trn | +401% | 2 |
| BAE Systems (LSE: BA.). | £88.5bn | +354% | 42 |
These stocks tend to share a few useful traits: large market values, strong demand in their sectors, decent earnings visibility, and in many cases, a history of paying and growing dividends.
In short — the kinds of businesses investors feel they can hold for the long run without too many surprises.But how can we better identify such stocks?
Identifying quality
BAE Systems is a good example of a stock that exhibits long-term staying power. Its business model tends to produce steady cash flow, and its margins have remained healthy.
The group’s 2025 results showed sales of £30.7bn, underlying EBIT of £3.3bn, and underlying earnings of 75.2p per share (each up 10%-12%).
And with a £63.1bn order book, investors have excellent visibility over future revenue, with 2026 guidance indicating another year of growth. That matters in a SIPP because reliable earnings are often more valuable than flashy short-term excitement.
Income appeal
Dividends is one area where BAE really shines, having been rewarding shareholders since 1983. The past 22 years were particularly good, with consistent increases ranging 3%-11% a year. Since 2022 alone, they’re up 36%, from 27p to 36.3p.
The 1.6% yield looks low because it’s fallen sharply over the past five years, but only because the share price has soared 346%. With only 50% of earnings going to dividends, the company has lots of spare cash to boost it further.
So what’s the catch?
In valuation terms, BAE isn’t cheap, with a forward price-to-earnings (P/E) ratio estimated at 27.5. That means the market already expects a lot from it.
If earnings disappoint, the share price could fall quite sharply. That’s the main risk with a quality stock like this: you’re paying a high price for reliability.
The bottom line
For a SIPP, consistency often matters more than excitement. A stock that can keep growing, without forcing investors to guess what happens next, can be a very useful holding over many years.
BAE Systems looks like one of those stocks, which is why it’s been a core holding of mine for years. It offers steady demand, reliable payouts, and a long record of discipline. It may not be the cheapest share on the market, but for pension money, it’s easy to see why many investors would want to consider it.
If defence stocks aren’t your cup of tea, I’ve detailed several other promising SIPP contenders lately.
