Investing through a Self-Invested Personal Pension (SIPP) is one of the best ways to build wealth for retirement in the UK. Thanks to these accounts, an investor can quickly and effectively accumulate a vast pool of savings.

What is the secret to this type of investment account? Well, there are three ways in which it can potentially raise your wealth.

Free money from the government

The huge advantage of investing through a SIPP is that contributions usually come with tax benefits. This is basically a reward from the government for saving for retirement.

Pay £800 as a basic rate taxpayer and the government will add a further £200 for you (an almost instant risk-free 25% refund). Higher and additional rate taxpayers may receive even greater tax relief.

Please note that tax treatment depends on each client’s individual situation and may change in the future. The content of this article is for informational purposes only. It is not intended to be and does not constitute any form of tax advice. Readers are responsible for conducting their own due diligence and obtaining professional advice before making any investment decisions.

No tax on profits and income

Another gigantic benefit is that there is no tax on investment gains or dividend income. In a SIPP, investments can grow tax-free.

This feature should not be skipped. If the investor held Rolls-Royce shares in a general investment account over the last three years and turned £2,000 into £25,000, they would have to pay capital gains tax of £3,600 or £4,800, depending on which tax bracket they are in.

However, if they held shares in a SIPP, they would not have to pay a penny of tax. This is a huge additional raise in their wealth.

Capital growth opportunities

Finally, most SIPPs offer access to a wide range of investments. There are plenty of opportunities to raise your retirement savings.

Rolls-Royce is just one example of a good investment in recent years. There are many other stocks (and funds) that have performed well and helped investors build wealth for the future.

Looking ahead, one stock that I think will do well (long term) is the stock market Crowd blow (NASDAQ:CRWD). It is widely considered the world’s leading cybersecurity company.

These shares are listed in the US but can still be held under a SIPP. Over the last three years, its return in US dollar terms has been approximately 65% ​​per year, but of course past performance is not indicative of future performance.

However, from the perspective of five years, I see huge potential here. Because the cybersecurity industry is likely to see tremendous growth as enterprises adopt artificial intelligence (AI).

Some experts believe that cybersecurity may prove to be bigger than artificial intelligence. Many believe the industry will be worth $1 trillion in the coming years.

CrowdStrike is unique in that it offers continuous cloud detection and monitoring services. Additionally, customers benefit from community immunity – if a fresh threat is detected at a company in London, every other CrowdStrike customer around the world is protected from the same threat within seconds.

Currently, this stock is exorbitant from a valuation standpoint as earnings are still modest (price-to-earnings ratio is around 100). This increases risk – investors should expect share price volatility.

There are also many other risks to consider. These include competition from rivals, software glitches and failure to prevent a cyberattack.

But looking long term, I’m very hopeful here. I think it’s worth considering this SIPP stock today with the stock trading far from its highs.