Best ready-made pension

8 min Read Published: 13 Jan 2023

Best ready-made pensionA ready-made pension can eliminate one of the main concerns you might have about saving for retirement: the hassle. You do not need to make lots of decisions and be a skilled or experienced investor. You can pick a platform and product that does most of the work for you. The downside is that this service can come at a price. You will not have the flexibility that comes with a DIY Self Invested Personal Pension (SIPP) and the fees and charges associated with a ready-made pension are likely to be higher. That makes shopping around all the more important. Here we go over some of the top ready-made pension providers in the UK to help you work out what will suit you. You can also read our full reviews of each provider, plus we cover the basics of how a ready-made pension works.

Top ready-made pensions

Below is a selection of providers that offer ready-made pension plans:

Provider Product Types Minimum Contribution Fees Number of ready-made portfolios Offer
Nutmeg SIPP £500 0.75% (up to £100,000),

0.35% (over £100,000, 0.25% with Fixed Allocation account)

10 Fully Managed portfolios

5 Fixed Allocation portfolios

Management fees waived for the first 12 months (Terms and conditions apply)
Moneyfarm SIPP £500 Actively managed: 0.75% (£500 - £9,999.99),

0.70% (£10,000 - £19,999.99),

0.65% (£20,000 - £49,999.99),

0.60% (£50,000 - £99,999.99),

0.45% (£100,000 - £249,999.99),

0.4% (250,000 - £499,999.99),

0.35% (from £500,000)

7 Management fees waived for the first 12 months* (Terms and conditions apply)
Interactive Investor SIPP £0 Columbia Threadneedle (CT) sustainable funds: 0.35%

LifeStrategy 20% equity fund: 0.28%

LifeStrategy 60% equity fund: 0.27%

LifeStrategy 80% equity fund: 0.27%

6 No SIPP fees for the first 6 months* (Terms and conditions apply)
BestInvest SIPP £0 Expertly managed portfolios: highest of £120 per year or 0.4% (up to £250,000),

0.2% (£250,000-£500,000),

0.1% (£500,000 - £1,000,000),

0% (over £1,000,000)

Ready-made portfolios: highest of £120 per year or 0.2% (up to £250,000),

0.2% (£250,000-£500,000),

0.1% (£500,000 - £1,000,000),

0% (over £1,000,000)

5 Smart portfolios

10 Expertly managed portfolios

Up to £1,000 cashback when you transfer at least £1,000* (Terms and conditions apply)
Penfold SIPP £0 0.75% (up to £100,000, 0.88% with Sharia account),

0.4% (over £100,000, 0.53% with Sharia account)

4 N/A
PensionBee SIPP £0 Tracker Plan and Preserve Plan: 0.50% (up to £100,000),

0.25% (over £100,000)

Pre-Annuity Plan: 0.7%(up to £100,000),

0.35% (over £100,000)

Fossil Fuel Free Plan: 0.75%(up to £100,000),

0.375% (over £100,000)

4Plus Plan and Shariah Plan: 0.95%(up to £100,000),

0.475% (over £100,000)

7 N/A
Wealthify SIPP £50 Standard: 0.60% (plus average fund fees of 0.16%)

Ethical: 60% (plus average fund fees of 0.70%)

5 N/A
AJ Bell SIPP £0 for a regular payment,

£1,000 lump sum

Funds: 0.25% (up to £250,000),

0.1% (£250,000-£500,000),

0% (over £500,000)

Shares: 0.25% (capped at £10 per month)

4 N/A
Fidelity SIPP £1,000 lump sum 0.35% or £45 if you don't have a regular savings plan (under £7,500),

0.35% (£7,500 - £250,000),

0.2% (over £250,000, capped at £2,000)

13 N/A
Hargreaves Lansdown SIPP £25 for a regular monthly payment,

£100 lump sum

Funds: 0.45% (up to £250,000),

0.25% (£250,000 - £1,000,000),

0.1% (£1,000,000 - £2,000,000),

0% (over £2,000,000)

Shares: 0.45% (capped at £200 per year)

3 N/A
Vanguard SIPP £100 for a regular payment,

£500 lump sum

0.15% (capped at £375 per year for accounts over £250,000) 5 (LifeStrategy funds) N/A

Best ready-made pension providers

There are a lot of pension providers on the market, but finding the right one for you does not need to be a stressful process. Here we break down the basics of some of the UK’s top ready-made pension providers to help you find the right platform for your retirement savings. We have also included a link in each section to our full review of that company’s platform.

Nutmeg

Nutmeg is a well-known robo-advice platform. Operating in the UK since 2011, it offers access to managed portfolios of exchange-traded funds. Nutmeg will grade you from the least risky (1) to the most risky (10) in order to gauge your appetite for risk.

Each option gets a detailed examination in our full platform ‘Nutmeg Review’. You can also read our take on the specific pension options in our ‘Nutmeg Pension review’.


Moneyfarm

Moneyfarm has grown to be one of the largest digital wealth managers in Europe. In a break from how other robo-advice firms work, Moneyfarm designates you an investment consultant to offer guidance – though not advice – on which of its portfolios to pick. The recommendation will be based on your goals, your retirement plans and your appetite for risk.

You can find out much more about the platform in our full, independent ‘Moneyfarm Review’.


Interactive Investor

Interactive Investor beginners are able to access the platform’s ‘Quick-start Funds’, which involve selecting from a list of six pre-prepared portfolios. It charges customers a monthly subscription fee instead of a percentage charge. This means you will always know how much you pay, but you may find a percentage charge works out cheaper if you have a small pension pot.

Read more about Interactive Investor in our full ‘Interactive Investor Review’.


Bestinvest

Bestinvest customers can opt for a ready-made portfolio at a relatively cost-effective price, though the fees for its ‘expert’ portfolios can add up over time. The platform is easy to navigate and set up, which can be a big boost for beginner investors looking to start building a pension pot from scratch.

We dig deeper into what Bestinvest can offer you in our full ‘Bestinvest review’.


Penfold

One of Penfold’s main selling points is that it does not require a minimum initial investment amount. Customers can also benefit from a setup process that can take under five minutes and the freedom to increase, change, or pause payments at any time. Penfold does not provide any financial advice, so you will need to rely on your own research to make some initial decisions.

Find out more about getting a Penfold pension in our independent ‘Penfold pension review’.


PensionBee

PensionBee is a specialist in helping track down old workplace pensions. Customers can then choose to consolidate multiple pots into a single scheme. This can be great if you have had multiple jobs over the years, as you would likely have contributed to a number of workplace pensions. PensionBee will also warn you if transferring your pension could leave you significantly worse off, for example because an old provider charges high exit fees.

Work out whether PensionBee could be a good match for you by reading our independent ‘PensionBee Review’.


Wealthify

Wealthify is a robo-advisor platform that gives customers the choice of five investment plans. You can pick from Cautious, Tentative, Confident, Ambitious or Adventurous – depending on your risk profile. Wealthify also offers an ethical investment option for each plan, which will be an important bonus for a lot of investors.

You can find out more by reading our full ‘Wealthify Review’.


AJ Bell

AJ Bell claims to specialise in curating a personal pension plan that is simple and easy to manage. Its ready-made portfolios include funds, unit trusts, investment trusts, ETFs (exchange traded funds), and foreign and UK shares. It is free to start your plan and you can track its progress online or through the dedicated app

Find out more by reading our full ‘AJ Bell review’.


Fidelity

The Fidelity SIPP offers a range of investments including funds, ETFs, investment trusts and shares. Be aware that there is a relatively high minimum investment amount of £1,000, but there is no cap on the amount you can invest. The tiered structure of Fidelity’s fees means you are likely to get more value for money once your pot grows past £250,000.

You can read more about Fidelity in our comprehensive and independent ‘Fidelity Review’.


Hargreaves Lansdown

Hargreaves Lansdown is the largest UK fund platform, managing around £120bn. Customers can choose from a good selection of ready-made portfolios, plus its website and app are easy to use. As you might expect from one of the most established names on this list, it may not always be the cheapest option.

We have much more information on how the platform could work for you in our thorough ‘Hargreaves Lansdown Review’.


Vanguard

Vanguard customers can build up their pension pot through one of Vanguard's 5 'Life Strategy' ready-made portfolios that include ETFs, active funds and index funds, though not stocks and shares. You will need to meet the minimum monthly deposit amount of £100, plus any lump sums will need to be £500 or more.

You can find out if Vanguard would suit you by reading our article ‘Vanguard SIPP review: Is it the best low-cost Pension?’.


What is a ready-made pension?

The key part of a ready-made personal pension is that the portfolio is made up of a mix of investments curated by a fund manager. It shares additional features with other types of pension – as it is still a savings pot for your retirement – but the key difference is that you do not need to choose where you are going to invest your money. The decisions have already been made for you.

In some cases you can choose from a selection of ready-made portfolios, while other providers will match you to the one that best fits your risk profile and investment goals. After that, your provider will manage your SIPP for you. It is one of the simplest ways of saving for retirement, so could be a great option for beginners looking to build a pension pot.

Pros and cons of a ready-made pension

A ready-made pension might not be for everyone, so make sure you weigh up how the positives and negatives could work for you.

Pros of a ready-made pension

  • Do not need to manage your portfolio yourself
  • Not many complicated decisions to make
  • Quick and easy set-up process
  • Portfolio built by experts
  • Great if you don’t know anything about investing

Cons of a ready-made pension

  • You don’t have the freedom to choose individual investments
  • The minimum investment amount can be high
  • Fees and charges can be higher than a DIY option
  • You won’t be able to change your investments to react to the financial market

How do ready-made pension fees work?

Your provider may have one fee or a series of separate fees. This can be frustrating as it makes it more difficult to compare providers by cost. It is still worth the effort though, as unexpected fees can quickly eat into your pension pot. We provide a detailed pension provider comparison that takes all fees into account in our article 'What is the Best & Cheapest SIPP?'

Here are some of the most common fees UK ready-made pension providers charge.

Platform fee

This is usually the headline cost of a pension and is the basic charge for using the platform. It is commonly paid annually as a percentage fee of your pension pot. Exactly how much you pay will depend on the provider you choose and how much money is in your pension pot. Some fee structures are tiered, so the more you have saved, the lower percentage you are charged.

Management charge

The cost of this will depend entirely on how your investments are managed by your provider. Passively managed funds are typically cheaper, while actively managed funds are more expensive. Essentially, if you want your provider to do more work for you, you will pay for it in fees.

Administration fee

This is sometimes added on by providers to cover the administrative cost of managing your pension account.

Exit fee

If you try to transfer an existing pension or consolidate multiple pensions into one, you may be charged an exit fee by your old provider. This can add up to quite a significant charge, so make sure to find out what it would cost to move your pension, as it could erode the benefit entirely.

 

Further reading

The Cheapest SIPP – the best value pension for you

The best & cheapest SIPPs – build a low cost DIY pension

How do private pensions work?

What is the State Pension triple lock?

Can I withdraw my pension?

How to find old pensions?

How to transfer your pension – everything you need to know

Can I have a personal pension and a workplace pension?

What is the best way to combine my pensions?

Best and cheapest Junior SIPPs

How much is the UK State Pension?

 

 

 

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