Important information
Tax treatment depends on your individual circ*mstances and may be subject to future change.
Your capital is at risk. All investments carry a degree of risk and it is important you understand the nature of these. The value of your investments can go down as well as up and you may get back less than you put in.
Keeping your pension in a ready-made portfolio can save you the stress of managing your own portfolio. We list some of the best options across the market below.
The importance of saving for retirement can’t be understated. For most of the population the state pension will be nothing more than a starting point for income in retirement, so ensuring you have an additional stream of income is crucial to ensuring that lifestyle you’ve wanted.
That’s why some people choose to let an expert manage their pension instead. If you’re one of these people, then below we’ve listed some of the best providers on the market.
This article explores:
- What is a ready-made personal pension?
- Our top five ready-made pension providers
- Do I already invest in a ready-made personal pension?
- What fees can I expect for my ready-made pension?
Read more: A simple guide to pensions
What is a ready-made personal pension?
A ready-made personal pension is one of the simplest ways of saving for retirement.
In most cases, all you have to do is choose:
- The level of risk you are willing to take
- How much you want to save into your pension pot each month
They are ideal for people who don’t know much about investing, but who want to start saving for the long term to build up a decent retirement income.
You can also add lump sums to your pension pots as and when you want.
Read more: Do you pay tax on your pension?
Our top five ready made pensions
Wealthify
Best for cashback
LATEST OFFER: Earnbetween £50 and £800 in cashback
New Wealthify customers could earn between £50 and £800 cashback when they invest a minimum of £1,000 in any one of Wealthify’s investment products.
To be eligible you must start your transfer requests within six months of offer registration (22 April 2024), and ensure all cash deposits are received within the same timeframe.Ts&Cs apply
Why we rate it: The annual management fee currently stands 0.6%, which is higher than other competitors but Wealthify doesn’t charge you to deposit or transfer money into your Plan.
If you’re looking to invest your pension ethically, Wealthify offers a range of options. These include funds from some of the top asset management companies in the world, such as Aegon and Royal London.
Average investment costs of 0.16% for original plans and 0.7% for ethical plans.
Your capital is at risk.The tax treatment of your investment will depend on your individual circ*mstances and may change in the future.
Dodl by AJ Bell
Best for cheap fees
Dodl by AJ Bell aims to make investing simpler. It does this by charging a single fee for managing your money which is 0.15% a year or £1 a month, whatever is higher. Still, beware that other costs still apply like foreign exchange charges and fund dealing fees.
On top of this, you can also simplify your investments by choosing to keep your money in AJ Bell’s “Pension Builder Fund”. In essence this is one of its more balanced portfolios, spreading your money across a large share of “defensive assets” such as cash and riskier investments such as stocks. This fund incurs a 0.31% charge.
Your capital is at risk.The tax treatment of your investment will depend on your individual circ*mstances and may change in the future.
Vanguard
Best for investors who want to manage some of their portfolio
Vanguard is one of the biggest investing platforms across the globe, so it has access to thousands of different funds, ETFs, and stocks.
However, it’s also a simple place for beginners. If you’re not confident in choosing your own investments, Vanguard will do this for you based on your risk appetite and when you want to retire. Then, the closer you get to retirement Vanguard will adjust your portfolio by moving your investments to less risky options.
One of Vanguard’s greatest advantages is that it’s a great place to keep some of your portfolio managed by a professional and the rest invested at your discretion.
It’s also a cheap platform, coming with a fee of 0.15%. Beware, other costs do apply depending on your investments. Some funds have management charges of 0.24% while other shares also charge 0.05% in transaction fees.
Your capital is at risk.The tax treatment of your investment will depend on your individual circ*mstances and may change in the future.
If you’re after variety in your investments then Fidelity is an option. It offers over 2,500 different investment funds, a range of global equities like Apple, and a selection of ETFs.
When choosing one of its ready-made portfolios you’ll need to use its navigator tool, which will generate investment ideas for your pension. It’s important to note that this doesn’t constitute financial advice and if you want something more personalised it’s best to seek the advice of an independent expert.
Whichever portfolio you go for, Fidelity charges the 0.35% platform fee, tapering to nothing when more than £1 million is invested. Other share and dealing charges apply.
Your capital is at risk.The tax treatment of your investment will depend on your individual circ*mstances and may change in the future.
PensionBee
Best for simple investing
PensionBee aggregates all your pensions into a single pot and gives you the option to invest into one of their seven funds.
These options range from specific shariah-compliant funds and fossil fuel-free stocks, which may broaden its appeal to certain people.
Charges range between 0.50% and 0.95% depending on your chosen plan, which is on the more expensive side. However, if you have savings of more than £100,000 then the fee is halved. There are also no charges for drawdown unless you withdraw your whole pot within 12 months.
Your capital is at risk.The tax treatment of your investment will depend on your individual circ*mstances and may change in the future.
Invest with Wealthify and you could earn cashback
New Wealthify customers could earn between £50 and £800 cashback when they invest a minimum of £1,000 in any one of Wealthify’s investment products.
To be eligible you must start your transfer requests within six months of offer registration, and ensure all cash deposits are received within the same timeframe.
Offer registration ends 22/04/24. T&Cs apply. With investing, your capital is at risk. Your tax treatment will depend on your individual circ*mstances and it may be subject to change in the future. Cashback varies by deposit/transfer amount. Wealthify is authorised and regulated by the Financial Conduct Authority.
If you have more than one pension pot you can take our ‘Should I consolidate my pensions?‘ quiz.
To help you find out if you’re on track with your retirement savings, we have created a free tool below. It only takes a couple of minutes to complete.
Get your tailored action plan for retirement
Find out if your retirement plans are on track and get specific guidance & simple actions on what you can do now.
- It only takes a couple of minutes
- No personal details required
Answers may be used to help us produce more relevant content and improve the overall site experience.
Do I already invest in a ready-made personal pension?
Companies have an obligation to automatically enrol new employees into the pension scheme within three months of them joining the business. Many of these schemes are managed on your behalf, so you may already have a ready-made pension portfolio.
Our pensions guide explains auto-enrolment in more detail.
If so, it could be a great idea to track down all the workplace pension pots from previous jobs and merge them into one fund. This can bolster your capital and give your fund a greater chance of growing.
At the same time it won’t be an option for everyone, as you could face expensive exit fees. Our guide on combining your pension explains.
Is a SIPP better for me?
If you feel comfortable managing your own pension then a Self-Invested Personal Pension (SIPP) may be a better choice for you.
By making your own investment decisions you could forgo the management fees that comes with a ready-made pension and save money.
Read our listings of the best SIPP providers to find out more.
What fees can I expect for my ready-made pension?
Some providers just list one all-inclusive fee, which makes it easy to see exactly what you’ll be paying. However, some charge separate fees which can make it difficult to compare the cost between providers.
Here are the main fees levied by pension companies that you need to be familiar with:
- Platform fee: It might be called a service fee, but you should expect to pay some kind of charge to theinvestment platformthat you use to set up your personal pension. Annual fees tend to range from 0.15% of the pension pot, up to about 0.5%. If it is any higher, it usually includes the fund management charge as well.
- Fund management charge: This can vary enormously. If you’re opting for a pension that is mostly made up of passively managed funds that just track the performance of a stock market, costs could be as low as 0.15%. But if you’re opting for more expensive actively managed funds, where fund managers buy specificstocks and shareswith the aim of outperforming an index, the cost could be as high as 1.5%. This charge is sometimes called the ongoing charges figure (OCF).
- Transaction fees: These are the costs that the fund incurs buying and sellingthe stocks it invests in. Because these change from year to year, the quoted number is usually an estimate based on the previous year’s activity. Some pensions include these costs in the headline price, but others add as much as 0.3% a year to the cost of investing – so it’s well worth checking the position before you commit.
- Transfer fees: Most ready-made personal pensions don’t charge additional fees for transferring your money to another provider. But some do, so check before you sign up.
Find out more:The impact of fees on investment returns
Should I use a financial adviser?
For those less confident about investing or who just want something quick and easy, ready-made personal pension schemes may be the best option.
If you’re planning to invest a large amount of money in a pension or have complicated financial needs, you should consider seeking professional financial advice. Kellands* is offering all of our readers a free hour-long session* with one of its independent financial advisers. They can get a good idea of your financial goals, and help you take the first step to achieving them.
It could also be wise to seek financial advice when you’re ready to retire and want to start taking the regular income from your pension scheme.
To find a financial adviser in your area, visit Unbiased*.
Find out: How much does financial advice cost – and is it worth it?
Important information
Some of the products promoted are from our affiliate partners from whom we receive compensation. While we aim to feature some of the best products available, we cannot review every product on the market.
