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Compare our best private pension schemes

Thinking about preparing for retirement? Compare our best private pensions from some of the UK's leading providers and find a plan to help your money go further when you retire.

  • Compare deals from leading private pension providers
  • See charges and fees at a glance
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Compare private pensions from leading providers

You'll only find results from genuine companies. Our data experts check each company before we add them to our comparisons.

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How to open a private pension

Private pensions let you choose exactly how much you're putting away for retirement as well as what that cash is invested in. To open one, simply:

1

Select a provider

2

Fill out some details

3

Decide your contribution levels

4

Regularly review your investments

Pension providers

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.

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Pensions in the UK

There are three sorts of pensions in the UK:

State pensions

State pensions are "qualifying benefits": the amount you get is based on your National Insurance contributions.

You need 10 qualifying years to be able to claim any kind of state pension; the full amount is only available to those who have made 35 years of contributions.

State pensions are paid out weekly to people who qualify, once they pass retirement age.

Currently the new full state pension pays £185.15 a week.

Private pensions

Private pensions enable you to save a pot of money to fund your own or someone else's retirement.

The government offers a substantial tax break for money paid into private pensions.

What you pay in and where it's invested is up to you - but you can't draw on the money until you're at least 55.

You can use the money however you like once you pass a set age.

Workplace pensions

All staff aged between 22 and 66 who earn more than £10,000 a year are eligible for a workplace pension. Employers must enrol staff on workplace schemes when they join the company - and then make contributions on their behalf.

The money either goes into a savings pot set up for you or into a fund run by your employer that will pay out a set percentage of your salary once you retire.

While you'll automatically be enrolled into a pensions scheme when you start working for a company, you can opt out if you wish, but this means you will lose out on the top-ups your employer would otherwise make.

What is a private pension?

Private pensions are a way of saving for retirement. They're pots of money that offer large tax breaks when you pay in, but that you can't access until you're 55 (or 57 after 2028¹).

The Government adds 20% to your contributions if you're a basic-rate taxpayer, 40% if you're a higher-rate taxpayer and so on depending on your tax band until you hit the annual or lifetime limit.

If you don't pay income tax, you get 20% added to the first £3,600 paid in a year.

Any growth of money held in a private pension is free from income and capital gains tax.

When you access your pension, you can take 25% of your savings as a tax-free lump sum. After that, money withdrawn from pension funds is taxed the same way as income.

But be careful – once you've accessed your pension, you're only allowed to pay in £4,000 a year to get the tax benefits – something to watch out for if you're still working at the time.

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What private pensions can I choose from?

There are two main types of private pension offered by the companies in our comparison service.

A personal pension plan

With a personal pension plan, you appoint a pension company and they choose the funds you invest in or give you a limited set of options. The money is put into investments (such as shares) on your behalf by the pension provider.

Self-invested personal pension (SIPP)

With a SIPP, you choose where you invest your cash. You can think of it as a kind of DIY pension plan. There's a large list of funds, shares and other assets to choose from. You can even use it to buy property.

If you don't want to choose your own pension funds then speak to an independent financial adviser to talk about the best pension plans for you.

"When choosing a private pension there are two main things to look at - charges and choice.

"High fees eat into your money, making any returns you make smaller, and over time the effect on your fund can be significant.

"Choice of investments is very much a personal matter - some people value the ability to pick exactly who and what they put money into highly, others would rather let someone else do it for them."

What is a workplace pension?

If you are an employee who makes more than £10,000 a year from a single job and are aged between 22 and 66, you will be automatically enrolled into a pension at work - although you can choose to opt out.

Your workplace pension can be one of two types:

Defined contribution – what's paid in is guaranteed

With defined contribution pensions you pay money into a pot, which then grows in much the same way as a private pension.

The minimum contribution is 5% of your pre-tax salary. Your employer adds 3% on top of this. Many firms allow you to pay additional voluntary contributions, while others will top up your money by more than 3%.

Defined benefit – what's paid out is set at the start

With defined benefit pensions you are paid a percentage of your salary at retirement for each year that you contributed.

Over your career, it's likely you'll build up a few pension pots. The good news is you can transfer one pension into another - either your current workplace one or a private pension - if you want to keep things simple.

Private vs workplace pensions

Private pensionWorkplace pension
Choice of providerYesNo
Choice of investmentsYesMaybe
Government top upYesYes
Employer top upNoYes
FeesUncappedCapped
ContributionsFlexibleFixed

How do pension tax breaks work?

The idea behind the tax break on a pension is simple - to only tax you on the money once.

So income tax is paid back on private pensions, and workplace pension contributions are taken from your salary before tax is applied. Once in a pension pot, any growth in your savings is also largely tax-free².

This is designed to compensate for the fact that the money you eventually take out of your pension is generally taxed as if it was income from an employer.

However, there are limits to the tax relief on private pensions:

  • You can only pay in the equivalent of your annual salary in any given year - with a hard limit of £40,000 no matter what you earn

  • A lifetime allowance means you can only qualify for tax breaks on contributions if you have less than £1,073,100 squirrelled away in your pension

  • Once you start drawing on your pension, the amount you can put away each year and still get a tax break falls to just £4,000

Is my money safe in a pension?

There are three groups that regulate pension contributions and investments. You should always check that your pension is overseen by one of these independent organisations before you invest to ensure that your money will be protected.

The Pensions Regulator

This looks after workplace pensions in the UK - both defined contribution and defined benefit

The Financial Conduct Authority

This regulates private pension schemes including SIPPs and personal pension plans

The Pensions Protection Fund

Protects people with defined benefit pensions, and pays out instead of your company if it goes bust

How much compensation you receive, will depend on the sort of pension you have and who regulates it.

SIPP holders can claim up to £85,000 back from the Financial Services Compensation Scheme if the UK-regulated provider of the investment fails.

The FSCS can also cover 100% of the loss, with no upper limit, if your pension plan is classed as a "contract of long term insurance" - as is the case with most annuities³.

With failed defined benefit schemes, the PPF steps in. It allows people already claiming their pension to continue to receive their promised payouts, while people yet to claim are offered up to 90% of their pension.

Every pension company found in our private pension comparison is FCA regulated.

Can you transfer a pension?

Yes. You might want to transfer your pension in the following cases:

  • you've changed jobs and would like to combine pensions into a single pot

  • your current pension scheme is closing

  • you've found a better deal on a private pension

You're allowed to transfer pension savings between registered UK pension providers and keep all your tax-free benefits.

If you transfer your pension pot anywhere else - or take it as an unauthorised lump sum - it will be classed as an "unauthorised payment" and you’ll have to pay tax on the transfer.

To transfer your pension contact, you need to check if:

  • your existing scheme allows transfers out

  • your new scheme accepts transfers in

You might need to make payments to the new scheme and be charged a fee by your existing scheme to make the transfer.

It's also possible that making the switch will mean you lose the right to take your pension at a certain age or any rights you had to take a tax-free lump sum of more than 25%.

Your pension providers will be able to tell you if any of these conditions apply.

Pensions FAQs

Explore private pension and retirement guides

See our full set of pensions guides here.

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How to invest in a SIPP

Self Invested Personal Pensions (SIPP) let you plan for your retirement without the need for a workplace pension. Here is how they work and what you should look out for.

Read more about SIPP's
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How to manage auto enrolment after your staging date

Once your workplace pension scheme is up and running the work does not stop there. Here is how to manage your pension after your staging date has passed.

Read more about managing your auto enrolment

Why compare pensions with money.co.uk?

Comparing private pensions could save you money. Our multiple award-winning comparison service makes sure you get the lowest rates possible based on your individual circumstances. Our aim is to provide you with the most up-to-date information, as well as useful tools and calculators so to help you make life's most important decisions and take control of your money.

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About our pensions comparison

¹The age you can access your private pension is set to rise to 57 in 2028 under current Government plans, however if your pension scheme says you can access your money at 55, you will continue to be able to do that no matter what year it happens in

²Growth in money held in a pension is free from capital gains and income tax, but dividends paid by shares held in the fund do attract a 10% tax

³Full FSCS guidance on what is and isn't protected if a pension provider fails

Last updated: 7 June 2022