‘How I turned my £100k pension into £1.8m – and beat the professionals’
Self-taught investor reveals the disciplined, value-driven strategy behind his 19pc annual returns.
Charlotte Gifford, Senior Money Reporter
Charlotte Gifford is a senior money reporter covering tax and investments. See more
Published 24 March 2026 11:00am GMT
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In 2008, James Hickman put his £100,000 retirement fund into a Self-Invested Personal Pension (Sipp). Today, it is worth £1.8m, having grown by 19pc a year on average, with pension withdrawals included.
By comparison, the MSCI All Country World Index has returned nearly 11pc on average since 1988. He has even beaten the pros – since launching Fundsmith, Terry Smith has only managed a 13.5pc annualised return.
So how did he do it? Telegraph Money caught up with the 57-year-old from Worcestershire, having first interviewed him in 2019 when his Sipp was worth £1m. Since then, he has sold the plumbing business he founded, giving him more time for stock-picking, one of his favourite pastimes.
“This is really more for fun now,” says Hickman, who is semi-retired. “I’ll probably never cash out. Whatever’s left will just go into the estate for the grandkids.”
Hickman is a value investor, which means he looks for stocks he thinks the market is underestimating. “The entry point for me tends to be when the share price starts to move up. Then, unless the fundamental reasons for buying it change, I’ll keep holding it as long as it doesn’t nosedive.
“I don’t trade very much. The average holding period is at least 12 or 18 months.”
Hickman says he goes for “anything that’s out of fashion, really. British American Tobacco was a holding I had for a while. That was up about 60pc from when I bought it.”
Having a larger pot has changed the way he invests. He owns about 10 to 15 stocks at a time, whereas he used to invest in only a handful at a time. It is harder to take risks when you have more to lose, he says. “I tend to go for the larger businesses these days because as the pot gets bigger, the risk aversion starts to take over and you become less cavalier.” His biggest holdings are HSBC, Legal & General, Shell, British American Tobacco and HICL Infrastructure.
He still keeps some money in a stocks and shares Isa for what he describes as “moonshot” investments – “stocks that are much riskier but might return 10 times or more”. These include the mineral exploration company Cornish Metals, US-based Hycroft Mining and the Canadian firm Vizsla Silver.
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One of the main benefits of saving into a Sipp is pension tax relief. For every £80 a basic-rate taxpayer pays into their pension, the government pays in £20, and higher-rate taxpayers can claim a further 20pc of their payments. Pension tax relief is estimated to save us £33.5bn in 2025-26, according to data from HMRC.
They will soon lose some of their lustre thanks to a change being made by the Government. From 2027 Sipps, like other pensions, will come under the net of inheritance tax.
‘My Black Monday lesson’
Early on in his investing journey, Mr Hickman was hit hard by the 1987 stock market crash. But so-called Black Monday taught him the importance of researching his stocks.
“The biggest lesson is: when everything’s going up, don’t be fooled into thinking it’s you being a genius. I didn’t really know anything, but I was making lots of money because the market was just hitting new highs all the time.
“So if anything, that spurred me on to do a bit of research and find out what really drives the prices, and start building some knowledge.”
Hickman creates a shortlist of firms he’s interested in using software called Stockopedia, which lets him screen companies against different financial criteria. Then he uses AI to help with background research and provide an overview of the company and its industry. “It’s probably only in the past 18 months that I’ve started using AI – but it’s a lot quicker,” he says.
Despite embracing AI for his research, he would never invest in an AI business. “I think AI is going to be totally transformational. But I remember the first dotcom crash, and that was very similar. A lot of businesses were being valued at huge multiples but very few of them came out the other side profitable. There’ll be a lot of casualties, I think – a lot of fortunes lost.”
He adds: “In the past two or three years I’ve taken more notice of the macro environment companies are operating in. So the current theme I’m following is structural materials deficits – the upcoming shortage in copper, silver and potentially oil. So I’m veering towards mineral and oil stocks at the moment.”
‘Investing is not gambling’
The main thing most concerning Hickman now is tax. “Everything I take out is taxed at my marginal rate, which is pretty ghastly.”
Because of this, he’s considering investing in SEIS (Seed Enterprise Investment Scheme) funds, which are focused on early-stage, high-risk startups and provide 50pc income tax relief. Investors can put away up to £200,000 a year. “Effectively, the 50pc tax relief on the SEIS covers the 45pc income tax I would suffer if I took it out.
“But it takes the fun away a little bit because you’re speculating on a lot of tiny businesses, and maybe one in 10 will turn into something good.”
So what advice does Hickman have for investors hoping to emulate his success? “I think a lot of people treat investing in stocks almost like gambling. I don’t think they remember that they’re buying part of a company that exists in the real economy.
“I think they get obsessed with price moves and forget that behind the ticker there are often tens of thousands of people engaged in developing new products and rolling out business plans.
“A lot of those strategies take months if not years to come to fruition – but you can get thrown off by the noise.”
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