If you feel a workplace pension doesn’t offer enough freedom and flexibility, a Self-invested Personal Pension (SIPP) may be the answer.

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.