Like a Stock and Shares ISA, a SIPP allows investors to choose freely from a wide range of stocks, bonds and commodities.

But unlike an ISA, it provides tax relief at the time of investment (as opposed to tax relief on gains down the line).

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.

For retirement investors happy to lock up their money for multiple decades, this can be highly advantageous. The investment is likely to compound quicker, leading to faster growth — especially if dividends are reinvested.

So how could I use a SIPP to deliver a steady (and liveable) income stream in retirement?

Crunching the numbers

A quick Google search tells me the average UK resident spends approximately £35 per day (after rent and bills). When accounting for inflation, this would equate to around £55 in 20 years from now.

So the average investor looking to maintain their current lifestyle should aim for passive income of £1,650 a month (55 x 30).

That’s £19,800 a year, which seems like a decent amount to supplement a State Pension.

Retirement experts recommended withdrawing no more than 4% per year to avoid depleting the pot too quickly. Since £19,800 is 4% of £495,000, that’s how much to aim for.

By investing £500 a month into a portfolio achieving average market returns of 10% a year, it could reach that in just over 21 years.

The steady growth portfolio

Chasing aggressive growth can be risky – one mistake can wipe out years of gains. But you can mitigate this risk by building a foundation of slow but reliable compounders.

Some good examples include Scottish Mortgage Investment Trust, Games Workshop, Experian, and RELX.

These are all companies with durable competitive advantages, higher earnings growth potential, and exposure to either innovative or global markets.

Then, add more growth potential to the mix by considering higher-risk options like Gamma Communications, Hochschild Mining, or Syncona (LSE: SYNC).

Let’s take a closer look at why I think a mid-cap biotech investment trust has growth potential.

Is biotech the future?

A big benefit of Syncona is that it offers exposure to a diversified basket of biotech assets. That makes it less risky than a company relying on one big product.

The team has secured reliable funding and positioned the portfolio around several key value inflection points over the next few years.

Since biotech is increasingly viewed as a potentially explosive industry, this is a key attraction. Plus, it’s backed by a powerful financing environment that’s helping companies raise capital.

Still, it is speculative in many ways. Syncona’s success depends on clinical progress, fundraising, and exits, so returns can be volatile and sentiment-driven.

A recent strategy update shows it’s reshaping its approach to maximise value and support shareholder returns. That’s great – but if the strategy doesn’t pay off, it could hurt the share price.

The bottom line

The reason I think Syncona is a smart stock to consider is two-fold: biotech could be the next big thing, and its diversified portfolio reduces risk.

However, these types of growth-boosters are best allocated only 3%–4% in a portfolio. Ideally, 50% of core holdings should still be well-established, large-cap growth and income blue-chips.

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But stocks on the UK’s mid-cap index typically serve more UK consumers in sterling, partly shielding them from currency swings and trade wars. While FTSE 100 blue-chips grab headlines, the FTSE 250 offers significant growth potential for patient investors.

Currently, two stocks stand out, with analysts predicting growth of over 100% in the coming year. They are Future (LSE: FUTR) and Syncona (LSE: SYNC).

But what’s the chance that these forecasts come true?

Future

Future publishes special-interest magazines and websites like PC Gamer and Cycling Weekly, earning revenue from digital subscriptions. After a challenging 2025 that saw AI impact e-commerce growth, it’s now trading at a low valuation. Now, eight out of nine analysts studying the stock give it a Buy rating, with an average price target of 1,148p — a 118.7% gain.

The recent acquisition of SheerLuxe helps strengthen its luxury lifestyle portfolio, targeting affluent UK audiences with cash to spare. With largely domestically-derived revenue, it’s better shielded from foreign upsets. Earnings per share (EPS) are forecast to reach £1.33 in 2026, up from £1.23 last year. But the core attraction here is the dividend story. With a 3.2% yield that’s well-covered by cash earnings, it offers a rare mix of growth and income potential.

However, the ongoing threat of AI can’t be ignored. Even though Future has done well to implement cost discipline and buyback initiatives, AI remains a persistent risk to the company’s core ad-driven revenue stream. 

Syncona

Syncona invests in early-to-mid-stage biotech, with over £1bn in assets like gene therapies and oncology platforms. Despite a net loss of £25.4m in H1 2025, analysts remain bullish. The average 12-month price target implies a 104% increase, supported by asset growth, successful clinical trials, and lucrative partnerships.

Its balance sheet looks healthy, with minimal debt and £30m in free cash flow helping fund late-stage investments amid biotech recovery. Still, it’s a speculative and evolving industry, leaving significant risk of losses if things go south. Upcoming venture capital firms are notoriously volatile, so investors should keep this in mind.

On the plus side, its UK-focused portfolio helps avoid tariff threats and thrives on global M&A waves. Although unprofitable for now, sales of assets like Freeline could unlock billions. It’s your typical high-risk/high-reward pick, so an ideal allocation shouldn’t exceed 5% of a portfolio.

Realistic targets?

Analysts update targets regularly, so no forecast at one point in time can be taken as a guarantee.

Future’s 118.7% target feels achievable if digital subs rebound, but with ad cyclicality, a 70-80% gain may be more rational. Syncona’s growth hinges on several biotech catalysts coming together, but VC-style losses threaten volatility. A 100%+ gain requires flawless execution in an already turbulent market.

For income-growth balance, Future looks worthy of consideration albeit as a small allocation. Syncona, on the other hand, should only be considered by investors with a high risk tolerance. As always, a diversified portfolio including a mix of stocks adds necessary defensiveness against economic shocks.

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Targeting life sciences

The life sciences sector is almost guaranteed to stir the animal instincts as we dream of multi-bagging investments driven by underlying businesses creating and commercialising blockbusting and novel treatments for diseases and ailments. However, the truth is that many companies in the sector fail to deliver the returns we hanker after, instead grinding on for years, burning the capital that’s invested in them and never actually scoring a meaningful commercial breakthrough.

Risk in the sector is rife, so Syncona’s declared intention to focus its investment strategy on building a portfolio of investee companies in life sciences strikes me as a potentially decent way of capturing upside and mitigating downside.

A pipeline of opportunities

The firm operates as a closed-end investment fund, which means we can’t redeem our shares against the fund, but we can buy and sell them on the stock market just like we can any other company. At the moment around 70% of the firm’s net assets are invested in other funds focused on equity, debt, commodities and fixed income. The remaining 30% is in life science companies, but Syncona plans to invest more from its portfolio of other funds into life science firms as opportunities arise. In its own words, the firm is targeting “Evolution to concentrate on creating, investing in and building global leaders in life science”.

Syncona reckons it has a strong pipeline of opportunities that should lead to the firm investing around £75m to £150m in new and existing life science investments during the current financial year. Meanwhile, investee firms already in the life science portfolio are making progress towards key milestones. I suspect that Syncona’s shares could have much further to go as the firm’s investment strategy plays out.

Production down, shares up

We also heard from Ferrexpo (LSE: FXPO) today as the firm issued its second quarter production update. The company specialises in iron ore, producing, developing and marketing iron ore pellets for the metallurgical industry. During the first half of the year, pellet production slipped by around 10% compared to the equivalent period the year before, which the firm put down to a planned 55-day pellet line refurbishment.

Of course, an investment here is all about the price of iron ore and where investors think it’s going. The underlying fluctuations of the commodity price directly affect the firm’s profitability and investor sentiment can magnify movements of the firm’s share price. At the beginning of 2016 Ferrexpro shares changed hands at less than 20p when commodity prices and resource company share prices sold off. Today’s share price around 202p represents a spectacular trade for investors brave and prescient enough to have bought at the lows.

Strong uptrend

City analysts following the firm have pencilled in a 62% increase in earnings per share this year and a decline of 37% for 2018, but there must be a lot of guesswork in those figures. All we really know for sure is that the uptrend in the shares seems to remain strong and I would take a punt on that while remaining vigilant for any sentiment-driven reversal.

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