This advice applies to England. Change country
Choosing a personal pension
A pension is a way of saving for your retirement. When you start looking for a pension scheme, one of your choices might be to take out a personal pension or stakeholder pension.
This page tells you:
- who provides personal pensions
- things to look out for when choosing a personal pension
- where you can get more information about pensions.
For more information about personal pensions and who they're suitable for, see Personal pensions.
With a personal pension you make regular payments (contributions) into your pension fund. This is then invested, for example in stocks and shares, to give you an income when you retire.
Stakeholder pensions are a type of personal pension which have to meet certain conditions. They can be a good choice for people who need a more flexible option because they allow you to vary the amount you pay and when you make payments.
For more information about how personal pensions and stakeholder pensions work, see Personal pensions.
Personal pensions are provided by insurance companies, often through banks and building societies, and sometimes through your workplace.
If your employer offers a pension scheme, check whether it's a personal pension or an occupational pension scheme. They're not the same thing and the benefits you get at the end will be different.
For more about occupational pensions and personal pensions from employers, see Workplace pensions.
There are hundreds of personal pensions on the market and choosing between them can be confusing. Here's some things to think about when choosing a personal pension:
- shop around to give yourself the widest choice and take your time to get as much information as you can before you decide. You could also use a comparison website such as the Money Advice Service to find providers and compare pension products. Go to: www.moneyadviceservice.org.uk.
- compare products from different providers. Ask for the key facts document for each pension plan you are considering. This is a summary of all the important facts about the pension plan. Providers are required to give you this information and you can make a complaint if they don't
- make sure you can afford the contributions. There may be a minimum payment. If you're on a tight budget or have irregular income, check whether you'll have to commit to regular payments or if you can vary how much and when you pay
- check what charges you'll you have to pay and when. These can include administration fees, transfer charges, charges for managing your investments, penalties if you miss a payment or take your pension early. Charges that are deducted from your fund will affect the amount of pension you get. Charges for stakeholder pensions are limited to a set level
- look at how the funds will be invested and what choices you have. Make sure you are happy with the level of risk you are taking
- get proper advice from an independent financial adviser
- don't sign anything until you're completely happy.
For more information about risk, see What's the best way to save.
For more information about how to work out your budget including an online budgeting tool, see Budgeting.
If you're thinking about taking out a stakeholder pension, you might find the Money Advice Service stakeholder pension decision tree helpful. This is an online tool which helps you work out if a stakeholder pension could be a good choice for you. Go to: www.moneyadviceservice.org.uk.
Pension scams have become more common since April 2015, when new rules allowed people to take some or all of their pension pot as a lump sum. These scams are fake investments designed to con you out of your money. They are often extremely convincing and anyone can be caught out.
Find out about scams and what to watch for at Pension Wise: https://www.pensionwise.gov.uk
For more information about other types of pensions, see Pensions.
You may also find the following Adviceguide information helpful:
The Money Advice Service
The Money Advice Service is a free, independent service. Their website has lots of useful information about pensions including comparison tables for choosing a personal pension provider and a pension calculator for working out how much pension you'll need. There's also a range of leaflets to help answer your pensions and retirement questions.
Go to: www.moneyadviceservice.org.uk.
The Pensions Advisory Service (TPAS)
TPAS is an independent organisation that provides free information, advice and guidance about all types of pensions including state retirement pension, company, personal and stakeholder schemes.