A Self-Invested Personal Pension (SIPP) can be a powerful way to build retirement wealth. For those who are unaware, it’s like a tax-wrapper that allows the investments inside to grow free of tax.
That matters over decades. Small differences in quality can become big differences in outcome when returns are left to compound for 20 or 30 years.
For that reason, I think a retirement-focused portfolio should start with businesses that are financially resilient, easy to understand and capable of producing steady returns through different market conditions.
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.
Three starter stocks to consider…
For a British investor opening a first SIPP, three names worth considering are Unilever, National Grid and Prudential (LSE:PRU). They sit in different parts of the market, which helps spread risk.
| Company | Sector | SIPP role | Main benefit |
|---|---|---|---|
| Unilever | Consumer staples | Core holding | Everyday products, defensive demand |
| National Grid | Utilities | Income anchor | Regulated cash flows, defensive earnings |
| Prudential | Financials/insurance | Growth and income | Asian exposure, dividend potential |
Unilever has the sort of profile many novice investors like in a pension. It sells everyday brands people keep buying in good times and bad, which can help support cash generation.
National Grid’s different, but just as useful in a long-term portfolio. Its regulated business model gives it a defensive feel, and that can be valuable when markets get choppy.
Prudential adds more growth potential. It’s not a sleepy stock, but it gives a SIPP exposure to insurance and asset management, plus a stronger link to Asia than most UK shares.
Why Prudential works
Insurers can make sense for investors who want financial exposure without buying a bank. They provide diversification within the financial sector without the same loan-book and credit-risk swings that typically come with bank stocks.
And Prudential is often cited as a leader in the UK insurance industry. In its 2025 full-year results, underlying operating profit rose 10% to $3.1bn and annual premium equivalent sales rose 7% to $6.2bn. Latest figures suggest funds under management at Eastspring, its Asian asset management business, sit at $275bn.
That gives the company a few attractions:
- It has a large life insurance and savings franchise.
- It has fee-earning, asset-management businesses that can lift earnings over time.
- It offers exposure to higher-growth Asian markets.
- It has potential for stronger growth in assets under management than slower-moving UK defensive stocks.
But even the most reliable stocks come with risk. Prudential’s exposed to market swings, currency moves and the Chinese economy, where trading conditions can be uneven. It also faces regulatory pressure and the usual risks that come with insurance, including claims trends and investment-market volatility.
Building patiently
For a SIPP, I’d rather add money regularly than try to invest one large lump sum at the ‘right’ moment. Pound/cost averaging can soften the impact of market noise.
This approach also makes it easier to stay calm. Solid, reliable stocks reduce the temptation to guess the market’s next move.
Unilever, National Grid and Prudential are all sensible starter stocks to consider when opening a first SIPP — but they’re not the only ones. The FTSE 100 has plenty more names that can play a similar role, from income machines to defensive compounders.
Should you invest £5,000 in Prudential Plc right now?
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Mark Hartley owns shares in National Grid and Unilever.
