Best Pension Plans In The UK

We all want our finances to be stable, right? Not only now, but in the future too. When we look at our retirement, we want many years of paying in a pension to work for us. However much you have put away, you want that to support you during the twilight years of your life. Not only support you but allow you to live the life you want to and enjoy the different things you want to in your retirement. In order to get the absolute maximum out of your savings for retirement, you need to look at the best pension plans in the UK. What plans are available? What providers have a history of great rates? Let’s look at what pensions are all about and at some providers you should consider starting a pension with.

What Is A Personal Pension?

You’ve probably heard about personal pensions, but what exactly are they? A personal pension is a plan that individuals contribute to throughout their working life, which will pay them after retirement. They are also referred to as private pensions. It is an alternative to the state pension that you get for between 10 and 35 years of National Insurance payments. Full state pension requires the full 35 years.

The value of a personal pension is usually based upon how much has been saved into the fund, as well as how the money has performed as an investment. This can go up. However you must remember, whatever the best pension plans are, with investments, your capital is at risk.

Who Needs A Personal Pension?

There are different people who might be considering a personal pension. If you don’t think you will be able to enjoy your retirement years on the amount you will get from a state pension, you should look into personal options. The state pension is currently £9399.20 a year. What is that amount compared to what you are used to living on? Would that cover the things you need to buy in your retirement? Ask yourself, how much pension do I need to live comfortably?

There are plenty of people who are employed who might pay into a workplace pension. One of the best things about that is when you pay in, your employer pays in too, giving your pension a boost. Take a look at our guide to see what is a good employer pension contribution-our survey results differed quite a bit in terms of how generous respondents employers were.

However there are also people who don’t have workplace pensions. Personal pensions are a great way to save for retirement for those who don’t have a workplace option, like the self employed. However even if you have a workplace pension, you could still open a personal pension as well. Anyone who is looking at saving for their retirement needs to consider a pension. When you look at best performing pension plans you can see how much you could be looking at once you get to retirement age.

Tax Relief Benefits

One of the best things about pensions, as well as the fact they can go up in value and give you amazing retirement years, is the tax relief. Most taxpayers in the United Kingdom get tax relief on their pension contributions. This means that for every £100 you pay into our pension, HMRC adds £25 on top. The Government tops up your pension when you save. Basic rate taxpayers get a 25% tax top up. The Government doesn’t give much away in terms of finance. So this is a great way to get a bonus whenever you pay in and build your pension. Get rewarded for saving for your future with the best pension plans.

How Much Money Do You Need To Retire On?

How much money do you think you need to retire on? You might have a number in mind but for many, the amount you’re going to need is much higher than expected. Whilst you might have that state pension money coming in, it might not cover everything you need it to. A private pension can certainly help top up your retirement income.

There are brilliant pension calculators online that you can use to figure out how much you’re going to need. Once you have that figure in mind you can look at how much you’re going to need to save every month or annually, in order to hit that target. Of course, nothing is guaranteed and the amount you get out might vary from those initial calculated estimates.

What To Look For In A Personal Pension Provider

In order to start saving and to get that tax relief, you need a pension plan. What should you be looking for in a pension provider though? What are the best pension plans? With so many potential options, comparing what is out there is the number one thing for you to do as a pension holder.

Some top tips include shopping around and doing your research before setting yourself up with a provider. Check for charges because different providers will charge for different things. Without knowing that info up front you aren’t in the know about what you’ll be charged. Check for any minimum contributions as well. Depending on your finances, you might want to only pay in as and when you are able. If there are minimum monthly contributions to make, you don’t want to be adding extra financial worry to the here and now, by taking out a pension for your future.

Finally, you need to look at how your money is going to be invested. There are a range of different pension plan options across all the different providers available. If you are trying to live a greener and more sustainable future, you might not want your money being invested in the fossil fuel industry. Different people with different lifestyles or religious views might not want investments in alcohol or tobacco. With so many different plans available, you should be able to find one you are happy with. If you are not 100% happy, don’t sign up.

Need some personalised pension advice? Speak to a financial advisor who will be able to advise options for your own specific circumstances.

You might also be interested in reading: How Much Should You Contribute To Your Pension In Your 20s?

The Younger You Start, The Better

The younger you are when you begin paying into a pension, the better off your pension fund could be. This is because you will then have more years to take advantage of compound interest. Small savings when you are younger, can have much more of an impact than bigger payments later in life. If you want to have, say £20k a year to take from your personal pension, the earlier you start putting money away, the less you’ll have to put away every month.

For every year you don’t put money away, that is time you will need to make up later, to take advantage of compound interest. It could be £150 a month when you are 20 years of age. But wait until you are 35 and it could rise to £600+ per month. Did you know that some people even start pensions for their children when they are only a few months old? That gives the fund plenty of time to gather interest.

Best Pension Plans in the UK

Remember, investments come with risk. If you are funding a pension now, you won’t be able to access it until you are of retirement age. The current retirement age of 55 years old rises to 57 in the year 2028. When you get to this age you can take 25% of your pension pot as a tax free lump sum. You can then do what you like with the rest. Take it & pay tax, take income drawdown, buy an annuity or do a mixture. You might want to seek financial advice when you get to retirement age to get the most out of your savings.

With the range of different providers out there, you need to find the best pension plans for your situation. A few of the names you may see include Hargreaves Lansdown, AJ Bell Youinvest, Moneyfarm and Vanguard. They all range in offerings and have different fees applicable as well. These could range anywhere from 0.15% to a capped 1%. You need to be sur that you are happy with the fee involved before you sign up. Some providers have plans that require minimum contributions whilst others don’t. Do your research and you can find a plan for you.

What If You Already Have Pensions?

Of course, this might not be the first time you have been thinking about pensions. Maybe you have had previous jobs where you have been paying into a pension plan. At this point in your life when you are looking at your future from a slightly more serious angle, you might consider pulling all of those funds together into one plan. This means you can keep a better eye on it and put your investments to work how you see fit.

When you sign up to PensionBee you can take advantage of their service to find your old pensions. Then you have all your pensions in one place. Less mess, less fuss, much easier to manage. You can even keep an eye on your investments on the go with the free PensionBee app. You can even access an area of the platform called BeeHive which helps you to make pension contributions when you are able. Your 25% tax top up from HMRC will automatically be claimed as well. What are the best pension plans in the UK though? 

PensionBee Plans & Levels Of Risk

There are different levels of risk involved with all investments. This includes your potential pension plans. When we look at the best pension plans available from PensionBee we can see seven options which range from high risk, to low risk, to responsible. Take a look at the plans below and you’ll be able to find the perfect pension for you.

Tracker Pension Plan

The Tracker plan follows the world’s markets as they move. It tracks what is going on. The plan will invest your money in global shares, bonds and cash. It is considered medium risk. It has an annual 0.50% fee.

Tailored Pension Plan

The Tailored plan moves with you. The younger you are, the riskier your investments. Moving through to safer investments as you get closer to retirement age. The combination of investments for growth and then for stability could really benefit your pension fund. It is considered high risk and comes with a 0.70% annual fee.

Fossil Fuel Free Plan

The Fossil Fuel free plan excludes any investments in fossil fuel and tobacco sectors. This could be perfect for those looking for a green and sustainable future, only investing in companies aligned with the Paris Agreement targets. It is considered high risk and has a 0.75% annual fee.

4Plus Plan

The 4Plus plan is considered medium risk, with your money put into a range of investments. It has aims to achieve long term growth of 4% per year above the cash rate. A 0.95% fee is charged. This could be perfect for those looking to access their pension in the near to medium future.

Shariah Plan

For those looking for responsible investments as well as a pension which will work with their faith, the Shariah is ideal. It will invest your finances in Shariah compliant companies that are approved by an independent Shariah committee. It is considered a higher risk plan and had a 0.95% annual fee.

Preserve Plan

For those wanting low risk, low reward and low fees, the Preserve plan could be perfect. The investments are short term and with creditworthy companies. This preserves your money as it reduces risk. The fees involved are 0.50% annually.

Pre-Annuity Plan

The Pre-Annuity plan is considered higher risk and has a 0.70% annual fee. This plan invests your cash in bonds to provide you with returns, broadly corresponding to the cost of purchasing an annuity or other guaranteed income product.


Your Pension, Your Way

PensionBee plans are designed for your own unique purpose. There will be one that works for your specific financial situation and retirement goals. The fees involved are also halved for anything you save above £100k in your fund. You can trust the experienced hands behind PensionBee, with money managers including HSBC, BlackRock, State Street Global Advisors and Legal & General.

Look into the best pension plans for you and start investing into your future.

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