Looking for the best private pension provider in the UK? Look no further. Here’s how to pick the best private pension for your retirement plans and some of the most popular UK options.
Private pensions in the UK refer to both your workplace pension (arranged by your employer) and any additional pension you set up yourself. We’re going to be focusing on the best private pensions you can create because you often don’t get a say about your workplace pension, so it’s out of your control.
Using the best possible pension provider you can get your hands on won’t guarantee you a perfect retirement, but it will put you on a solid path to achieve your goals. One of the great things about UK private pensions is the freedom you have to combine and control your pots. So it’s well worth taking advantage of those pension freedoms.
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What makes a great private pension provider?
There are few universal elements that help make UK private pension providers stand out as a top option. Here are some key things to look out for when looking for the best private pension provider:
Investment options. One of the best things about controlling and managing your pension is the ability to invest it how you choose. So, it’s extremely helpful if your pension or self-invested personal pension (SIPP) offers the investments that suit your strategy and goals.
Low fees. Whether you’re just starting to save into a private pension or nearing retirement, keeping your investment fees low with your pension provider is one of the best ways to make sure savings go further and let you reach your retirement goals faster.
Simple pricing. Unfortunately, some pensions are cheap, but you need a PhD to decipher all the fees and the industry is full of confusing and useless jargon. A great pension provider should be both affordable and clear when it comes to fees and costs.
Clear interface. Your retirement investments and pension are a crucial part of your finances, it’s not an area to muck around with. The best pension providers in the UK should provide clear and useful ways to interact with your pension, whether that’s with a well-designed mobile app or intuitive. This way you can better understand and control your retirement investment portfolio.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
How to pick a private pension provider
Here are a few questions to ask yourself to help you find a private pension provide:
Do you want to consolidate your pensions? Most private pension providers in the UK should allow you to combine old workplace pensions to keep everything under one roof (just check you won’t forfeit any benefits if you do this though).
Do you understand how the fees are structured? Ensure you’re completely clear on how fees are charged, you’ll normally pay a platform or account fee to the pension provider and then investment or fund fees on top.
What do you want to invest in? Each private pension provider will offer various types of investments. Think about what you’d like to invest in and find a pension platform that offers what you want.
Are you looking for an app? Some of the newer SIPPs have excellent apps to help bring the pension investing experience out of the dark ages and into the 21st century.
Private pension jargon buster
Here’s a quick overview of some key terms and phrases that you may have been scratching your head over:
Defined contribution (DC) pension. This is what most private pensions in the UK are these days. A DC pension means that you contribute to a pot (and get tax relief on your contributions). When you reach retirement, you can choose what to do with that pot, whether that’s drawdown or buy an annuity or whatever else.
Tax relief. When you contribute to a private pension in the UK, you’ll get a certain amount of tax relief that depends on your income tax bracket. Essentially it’s a government top up that replaces the tax you’d already paid on that money.
Annuity. When you purchase an annuity with your pension pot, you get some sort of guaranteed income for a specified period, or for the rest of your life in some instances.
Self-invested personal pension (SIPP). A SIPP is the most common type of private pension outside of workplace pensions. Plenty of providers and UK investment platforms offer SIPPs and they vary in terms of fees, investment options and features.
Frequently asked questions
This will depend on what you’re looking for as a retirement saver. Each private pension provider is designed with a target audience in mind, so it’s best to think about what type of investor you want to be and then you can find the best private pension to suit your style.
A good private pension in the UK should have low fees, a wide range of investments, and helpful tools like calculators and projections. It should be flexible, letting you adjust your contributions or investments easily, and make it easy to track your progress as you head towards retirement.
You should compare fees, investment options, brand reputation, and tools available. Look for a provider with a solid customer service track record, a user-friendly platform that’s free from jargon, and pension investments that fit your risk appetite and retirement goals. It’s also worth checking if they offer added benefits, like financial advice or ethical investment options.
Legal & General is one of the biggest pension providers in the UK, with over £1 trillion in assets under management (AUM). Other major players include Aviva and Scottish Widows. There are also plenty of newer brands like AJ Bell, Hargreaves Lansdown and others.
Pensions are long-term investments. You may get back less than you originally paid in because your capital is not guaranteed and charges may apply. Keep in mind that the tax treatment of your pension and investments will depend on your individual circumstances and may change in the future. Capital at risk.
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George is a deputy editor at Finder. He has previously written for The Motley Fool UK, Nasdaq, Freetrade, Investing in the Web, MoneyMagpie, Online Mortgage Advisor, Wealth, and Compare Forex Brokers. He's focused on making personal finance and investing engaging for everyone. To do this he draws from previous work and his Level 4 Diploma for Financial Advisers (DipFA), sharing what he’s learnt. When he’s not geeking out about money, you’ll find him playing sports and staying active. See full bio
George's expertise
George has written 177 Finder guides across topics including:
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