Let the experts do all the work – sit back, relax and watch your pension grow. You’ll get a 25% bonus from the government too.
Take control of your pension. You decide which investments to make. You’ll get a 25% government bonus too.
Set up by the Government. When you reach 66 years old, you’ll get up to £185.15 per week. You might struggle to live on just this.
Set up by your employer. If you’re employed, you’ll probably have a workplace pension.
To help you decide, we’ve put together the average rating from Google, Apple, Trustpilot and ourselves. Our own rating is based on our own research and experience.
Let your pension worries disappear. PensionBee simplifies your pension – they move all your previous pensions into one easy to use platform, with one annual fee, simple fund choice and great customer service. You can start a new pension if you’re self-employed too. Here's our PensionBee review to learn more.
By the way, you'll get £50 for free when you sign up with Nuts About Money.
Penfold makes growing your pension as easy as storing money under your bed. If you’re self-employed, this is the pension provider for you, and even if you’re employed, it’s great to combine all your old pensions into one place. Here's our Penfold review.
Moneyfarm is like a financial advisor on your phone (or website), their experts will work with you to determine the best investment strategy. It’s low cost, with an excellent investment track record and great customer service. Here's our Moneyfarm review.
Get up to £500 cashback when you sign up before 28th October too.
Wealthify is a simple straightforward pension, with one low annual fee. Experts manage your pension for you, and the customer service is excellent.
Want to save for the future and make your money work for you, but not sure how? Nutmeg could be for you. They handle all the investing for you – you just sit back and watch your money grow, whenever and wherever you like. Here's our Nutmeg review.
Aviva are a traditional pension company. If you've got a workplace pension, it might be with Aviva. They're a large company who hide fees, are not transparent with the performance of your pension, and customer service is very poor. A very outdated pension provider.
Standard Life have been around for years and years but have not modernised too well. Very traditional, and large company, with poor customer service, hidden fees, and lack of transparency over your money.
Bestinvest offer a pension with the choice of either experts managing your money, or managing it yourself. You can get free advice from their financial coaches to help plan your pension. The annual charge is low, but you'll pay more hidden fees within the investments themselves, which can be high. There's a good mobile app to track your pension too.
Evestor is a new company – it's trying to be super simple and low cost, but doesn't yet compare with the others in this table. The customer service is poor too.
Take control of your pension – you decide which investments to make.
AJ Bell Youinvest are a great traditional broker, with good customer service and solid reputation. They're low cost – you'll pay a low annual charge and then fees per deal, which are £1.50 for funds and £9.95 for shares (online), which reduces to £4.95 if there were 10 deals or more in the previous per month. Plus, there's a phone app too. Overall, a great choice, and worth out. Here's our AJ Bell Youinvest review.
Buy shares and funds for free! Leave the oldies stuck in their ways with their expensive banks and brokers. Freetrade is the modern way to invest your money – all done on an awesome app. An SIPP is £9.99 per month rather than a fixed percentage, so costs don't increase as your pension grows, and theres no charges for making investments – making it cheap overall. And there's a big range of investment options. Here's our Freetrade review.
Fidelity is a traditional investment company with a solid history and great service. SIPPs fees start at 0.35% per year (and reduce), and £10 per share trade – so average for costs. An OK range of investment options.
Interactive Investor is a modern broker with a huge range of investment options. It has a great website and app to manage your money, and great customer service. It's a flat monthly fee of £12.99 for an SIPP, rather than a fixed percentage of your investments – which can make it cheaper than traditional options, but there's still a charge per trade (£7.99). Overall a good option for your pension.
Hargreaves Lansdown is a very traditional broker, and very expensive. An SIPP costs 0.45% per year, and £11.95 per trade. A good reputation and customer service but you're paying a lot for it. Here's our Hargreaves Lansdown review.
Vanguard is very cheap compared to traditional options, with an annual fee of just 0.15%, capped at £375 per year. You can only buy Vanguard funds however, so a limited range, but their funds are very popular. A good option for less active investors.
Bestinvest is great for those a bit less confident. There's good support with a free financial coach, but the range of investments is limited compared to bigger brokers. There's a 0.40% annual fee for SIPPs (min £120), and a charge for share purchases (£4.95). There's a mobile app too.
A personal pension is a pension set up by you, rather than the government (called the state pension), or your employer (called a workplace pension).
It’s a pension that's all in your name, and it’s all your money. You decide who your pension is with and how much you put in.
It works similar to a pension you might have from your workplace, and technically a personal pension and a workplace pension are both types of private pensions. They’re all yours – and if you pass away, they’ll be passed onto your family (or next of kin).
Whereas the state pension is a public pension, as it’s provided by the government (a public service), and if you pass away, it probably won’t be passed onto your family.
And with a personal pension, unlike a workplace pension, where your employer decides everything, you get full control over where and how your pension is managed. Don’t worry, it’s simple and you can let the experts handle everything, you just get the choice of which pension company you use, called a pension provider.
As you decide the provider, that means you can shop around for the best rates (lowest fees), and best investment performance (looking at previous performance). Or, you might like a provider with a great phone app, or expert advisors there if you need them. The choice is yours!
And if you’re more experienced, you can open a self-invested personal pension (SIPP), where you can make the investment decisions for yourself too, and buy and sell investments. Here’s the best SIPPs.
Best of all, with all pension pots, you’ll get a bonus from the government, which starts at 25% of what you put in. More on this below!
With a pension pot, you’ll get a bonus from the government – a massive 25% top-up on what you put in.
This top-up is intended to reimburse the amount of tax (basic rate tax) you’ve already paid – as paying into your pension is intended to be tax free.
Why tax free? Well, the government want people to save as much as they can for their retirement, as the state pension is probably not going to be enough for people to live on just by itself any more.
If you’re a higher rate tax payer (meaning you earn more than £50,270), you’ll actually get 40% back (but only on the amount you pay 40% tax on), and the same if you’re an additional rate taxpayer, getting 45% back. Winning!
With the 25% bonus, your pension provider (the company who is looking after your pension), will automatically claim this bonus from the government and add it on to your balance.
With higher rate (40%) and additional rate (45%) taxpayers, you’ll claim this each year as part of your self-assessment tax return – which is an online form you can fill out after each tax year (which ends of April 5th every year), telling the government you’ve been paying into a personal pension and would like to claim your tax back (your pension bonus).
This is different to a workplace pension scheme (the pension set up by your employer). With a workplace pension, first, your money goes into your pension before you pay tax, then the tax is deducted from what is left over. So, you haven’t actually paid any tax on the money you’re paying into your pension. It’s all handled by your employer.
However, with a personal pension, you’re using money that you’ve already paid tax on (e.g. your salary after you’ve paid tax), and so you get the amount you’d paid in tax, back as a bonus.
It sounds confusing but it’s really quite simple, you just get your tax back on the amount you pay in!
With the money within your pension pot – it’s effectively tax-free when it’s growing, meaning you won’t pay Capital Gains Tax, which is a tax you sometimes pay when your money has increased from assets growing in value – such as if you buy an investment and then sell it later and make a profit. This is great news as your money will grow much faster!
You will pay tax when you start withdrawing your money from your pension pot however. The first 25% is tax-free, and you can take this as a tax-free lump sum in one go when you reach 55 (57 in 2028), or if you take little bits here and there, you won’t pay tax on 25% of what you take out.
With the remaining 75% of your pension, you’ll pay income tax on it. So, that means if your yearly earnings are above the current tax personal allowance of £12,570 per year, you’ll pay 20% tax, and if your earnings are over £50,270 per year, you’ll pay 40% tax on the money above that.
So effectively it’s just the same as a job, but ideally you would have retired! And your pension could be the only income you have which could mean you’re not paying any tax at all later in life.
You can actually pay as much as you like into your private pension, however, there are limits on how much tax relief you can claim on your workplace pension and limits on the tax benefits on a personal one (i.e. the juicy 25% bonus from the government). More on those limits below.
If you’re lucky enough to have lots of cash burning a hole in your pocket, you might want to pay as much as possible into your pension to benefit from the government bonus. But, there are limits on the amount you can pay into your pension and still claim the bonus (tax back). Which are:
These limits could change over time, and all the latest limits can be found on the gov.uk website.
A private pension is a pension that’s in your name, and that you contribute to yourself. For instance a workplace pension, that’s set up by your employer, but it’s all yours and you’ll contribute to it through your salary.
A personal pension is a type of private pension, it’s just like an employer pension, except you set it up yourself, and can move it around and contribute however much you like! It’s a great way to increase your retirement savings in addition to a workplace pension.
The state pension is a bit different, this is the pension you’ll get from the government when you turn 66. This is also called a public pension. You don’t have much control over it, and the government can make changes if they like. Whereas a private pension is more like a savings account, it’s all yours!
A self-invested personal pension (SIPP) is a pension you can easily set up yourself, and it gives you the ability to invest your money however you like.
So you could buy shares of a specific company, such as Google or Amazon, or you could invest in specific investment funds (groups of investments packaged together) that you like.
You’ll still get the government bonus too – a 25% top-up of whatever you pay into your account (and 40% if you’ve paid higher rate tax on some of your income).
We recommend SIPPs for more experienced investors as you’ll need a solid investment strategy to outperform the experts at other pension providers. But if you think it’s for you, check out our recommended SIPPs and our best investment platforms UK.
However, if you’re new to pensions and investing, start with a personal pension managed by the experts, such as PensionBee¹. You can always start an SIPP later!
If you’re self-employed, you’ve got lots of benefits – like being your own boss, and choosing your own hours! But when it comes to pensions, you don’t have an employer to set up a pension pot for you (actually the only good bit about an employer setting up your pension is that they have to add at least 3% into it themselves by law).
In general, personal pensions are far better than workplace pensions. You get to decide which pension provider you want to use, so you can shop around for the best rates (lowest fees), and best investment performance (in previous years) from the best pension companies – and a provider with a phone app, or expert advisors ready to answer your questions. The choice is yours!
The only downside is you don’t get the contributions from your employer as you do with workplace pensions. But you’ll still get the government bonus, starting at 25% of what you put into your pension (for basic rate tax payers).
So, to set up your pension, you’ll have to choose a personal pension provider and set it up yourself (it’s easy, really!).
Your best option is to go with a personal pension managed by the experts. The experts will handle everything for you, just like a pension you’d have if you were employed.
All you need to do is add cash, and you’ve got the flexibility to make contributions whenever and for however much you’d like to.
Our recommended options are in the private pension comparison table above. And our top pick for those self-employed is PensionBee¹ – they’re 5 star rated, and you can get £50 free when you sign up too!
Pensions might seem complicated, but they’re actually really simple these days.
The hardest part is finding the right pension company for you, but luckily we’re here to help and have done the hard work for you and researched and reviewed the best – all in the private pensions table above.
Once you’ve found one you like and signed up, it’s all over to them. They’ll handle everything for you, that’s transferring existing pensions over if you have them, to setting up any regular payments you’d like to make.
You’ll normally have to choose how you’d like your money invested, for instance if you’d only like ethical investments (so no oil or gas companies for instance), but they’ll help you with this too.
They’ll even collect the government bonus for you – that’s the 25% you get free on everything you put into your pension pot.
So really, all you need to do is put your feet up, add to it regularly if you can, and watch your pension grow over time.
The FCA makes sure pension providers are treating customers properly and fairly, and the compensation scheme means should a personal pension company (provider) go out of business (which is extremely unlikely), that you’ll get all your money back.
An SIPP is slightly different, where you are protected up to £85,000, if the pension company goes out of business. But most of your money would actually be stored in the investments themselves, which are separate to the pension company, so you’d get all of these back.
And if you believe a pension company or financial advisor has given you bad advice, you can also make a compensation claim for up to £85,000.
So rest assured, your money within a pension is very well protected. But remember, the value of your investments and pension value can rise and fall over time.
Workplace pensions are also looked after by The Pensions Regulator.
You’ll be able to access your private pension pots much earlier than your state pension (which is from age 66). From 55 you can access your private pension(s), but it’ll be 57 from 2028, unless you are diagnosed as terminally ill, then you can access it immediately.
When you’re able to access it, you can take up to 25% completely tax-free! The rest may be taxable, depending on how much income you are getting, so you might want to wait until you officially retire before you think about taking the cash, so you reduce the amount of tax paid overall. Here’s more information on pensions and taxes.
With a private pension, as it’s all your cash (and not the government's cash like the state pension), it will pass to your next of kin or someone you specify with your pension provider. It’s not lost forever.
Here’s more information on what happens to your pension when you die.
A self-invested personal pension (SIPP) is where you decide where your money is invested, and you buy and sell these investments yourself, through your pension account.
Whereas a typical personal pension is where experts make all the decisions for you. You don’t need to lift a finger, just sit back, let them do work, while you watch your pension grow over time.
SIPPs are more flexible as you have more investment options, but they’re suited to experienced investors with a solid investment strategy. And often already have a personal pension managed by the experts, but want to add a few extra investments on top.
If you’re new to pensions, we’ve got our recommended providers above.
Yep! And it’s highly recommended, and very common.
A workplace pension is set up by your employer and it’s their choice who they decide your pension is with (and often not the best choice, with expensive fees and poor performance).
With a personal pension, you have control over who your pension is with, and can transfer to another company whenever you like. So you can choose a pension provider with low fees, good performance and perhaps have a great phone app that allows you to track your pension whenever you like.
You’ll also get all the same benefits as a workplace pension, such as tax-free contributions thanks to the government bonus, but you won’t get the employer contributions (which your employer is forced to make by law, and is a minimum of 3%).
If you’re lucky and have an employer who matches your contributions up to a certain point, it’s often better to pay into your workplace pension up until the point where your employer no longer matches your contributions (which is basically free money).
And after that point start paying into your own personal pension instead, to benefit from potential cheaper fees, better performance and more control over your money.
A stakeholder pension is another type of private pension, but an older type of pension, and not often used, but are still available, and some employers can offer them. However you most likely do not have one.
They were designed for those who might struggle to get access to a ‘regular’ pension – such as those on low incomes or who work part time (your employer is not required to open a pension for you in these circumstances), or you could be self-employed with fluctuating income.
However, they’ve mostly been replaced by personal pensions and self-invested personal pensions (and all the best private pension plan providers are listed above).
They’re slightly different however, they must follow 3 rules:
Although this all sounds great, and it is, most private pensions also have low fees and low minimum payments – so they’re not really that much different, and there’s also restrictions on where your money can be invested with a stakeholder pension, so they might actually grow slower than other pensions too.
If you’re self-employed, or on a low income, or just want a manageable pension to grow your pension savings, you’ll probably be better off with a personal pension such as PensionBee¹.
Although it’s a great idea to put as much money into your pension as you can to have a nice big retirement income, there is actually a limit on how much the value of your pension can get to and still get all the same pension benefits.
It’s big though! It’s £1.073 million. So most of us won’t reach that amount, but it is reachable if your pension investments are doing well and grow large over time.
If you do reach the limit, you’ll have to pay some hefty charges when you withdraw your money.
With a private pension you would pay tax (income tax) when you take money out, with the first 25% being tax-free, and the remaining taxable (but you won’t pay tax if you withdraw less than the current personal allowance of £12,570).
Anyway, if you go over the limit of £1.073 million with your pension pot, anything above this you’d pay 55% on if you took it as a lump sum, ouch! And if you took it as an income you’d pay an additional 25% on top of what you would be paying in income tax – again, ouch!
The lifetime allowance can increase over time though, but it’s all up to the government. So don’t panic just yet, unless you’re close to the limit already!
A pension fund is a bit different to your actual pension provider. A fund is a collection of loads of cash from lots of different people – everyone’s pension pot. And this money is invested by the fund (often called the pension plan), with the aim to of growing it safely over time – so you have lots of money in retirement savings when you retire!
The investments they make are often in exchange-traded funds (ETFs), which are groups of stocks and shares (tiny portions of ownership of a company), alongside other investments such as bonds (which are effectively loans to businesses and governments that pay interest) and sometimes property.
Pension funds have their own fees in addition to pension providers (mostly), and they’re deducted from your pension pot itself each year - you don’t need to pay anything extra yourself. These are called fund management costs, or sometimes an annual service fee.
Yep! All private pensions are regulated by the Financial Conduct Authority (FCA) – they’re the people who authorise and review companies to look after your money (state pensions are managed by the government), and look out for pension scams.
Your money is also protected by the Financial Services Compensation Scheme (FSCS), which means if the company looking after your pension closed down or went out of business, you’d get some or all of your money back.
If your pension provider closed down, you’d get all of your money back.
If it was an SIPP operator, you would get back up to £85,000. However, with an SIPP your money is actually within the investments themselves, which are in your name, and can only be returned to you (the SIPP provider cannot access them). You are also covered per company, not in total.
If a financial adviser gives you bad advice, you could also get up to £85,000 compensation.
Of course, if the value of your investments go down, you are not protected. Your capital is at risk as they say. However pension funds aim to grow your money safely and securely over time in low risk funds.
So, there we go! That’s all the information you need to compare the best private pension schemes. And really they’re personal pensions, you don’t get much say over which pension your employer chooses for you (the other type of private pension, called workplace pensions).
All that’s left to do is choose the best pension provider for you, and start saving money for your retirement fund (add pension contributions) and increase that retirement income for a secure financial future.
As a quick recap as to how we decided the best – we’ve looked at: how easy it is to set up and manage a pension, add money to your pension pot, the range of pension funds on offer, and costs – which are things like fund management charges, annual service charges and pension fees in general.
All the best with your pension savings! Slow and steady wins the race – add as much as you can afford when you can afford it, and automatic regular payments are a great idea.