Best personal pensions & SIPPs

Clare says

With an average return of 80.5% over 5-years on their recommended pension from the BlackRock LifePath range, Moneybox customers can benefit from one of the best performing personal pensions on the UK market. With this choice, your money will be invested differently as you age, with risk levels adjusted to the stage of life you are in. That's sensible, as you'll want to lower the level of risk your savings are exposed to as you close in on your planned retirement age.

There's not a whole lot of choice with Moneybox as this is a person pension and not a SIPP. There are just three other options that Moneybox customers can choose: the Fidelity Index World fund; a socially responsible fund; and the HSBC Islamic Global Shares fund. This isn't, therefore, an option for those who want to pick and choose their own stocks.

Platform fees of 0.45% on balances up to £100,000 (reduced to 0.15% on balances over £100,000) plus 0.09% – 0.88% fund provider fees will work out comparatively expensive. But you're getting an easy to set-up and easy-to-manage, high performing provider for your fees, which you might feel makes Moneybox good value for money. Of course, it's essential to remember that past performance does not predict future performance so those great returns are not guaranteed.

Fees

• £0 monthly subscription fee
• 0.45% platform fee on balances up to £100,000
• 0.15% platform fee on balances over £100,000
• 0.09% – 0.88% fund provider fee

Use this platform if

• You want a fund that has historically performed very well
• You want to manage your pension via an easy-to-use mobile app
• You want to pair an ISA with your personal pension account

Investments

• US stocks
• Fractional shares
• Funds
• ETFs
• Ready-made portfolios

Clare says:

AJ Bell's SIPP is a popular choice thanks to the brand's reputation for good customer service, low fees, and a wide range of assets to invest your SIPP in. If you decide to take a DIY approach, you'll be able to choose from the majority of UK shares, stocks from 24 international share markets, and over 2,000 funds, as well as investment trusts, bonds and Exchange-traded funds (ETFs). There's no fractional shares at AJ Bell, though, which is a shame.

If you decide to use a ready-made portfolio for your SIPP, AJ Bell offers 16 different options, all suggested as top choices by the AJ Bell investment team. For those who want as little responsibility for investment choices as possible, AJ Bell suggests their AJ Bell Balanced fund. Over the past five years, this has produced 29% returns for investors. That's not spectacular considering Vanguard's recommended fund produced returns of 88.1% over the same period, but it's just one option among many AJ Bell offers so I'd advise checking the Key Investor Information Document (KIID) that every fund should provide, where you'll find past performance data.

On fees, AJ Bell is one of the lowest-priced investment platforms in the UK, although watch out for dealing fees which can add up.

Fees

Custody charges

• 0.25% (max £10 per month) for shares/ETFs
• 0.25% – 0.10% for funds (0% for funds over £500k)

Annual ongoing charges

• 0.31% for Growth funds
• 0.45% for Responsible Growth fund
• 0.65% for Income funds

Share dealing fees:

• Standard share dealing charge: £5.00
• Frequent shares dealing charge (10 or more trades in the previous month): £3.50
• Funds dealing charge: £1.50
• AJ Bell fund: no dealing charge

Use this if

• You want to build your own SIPP and want access to a good choice of assets
• You value good customer service
• You want low fees from a well-established provider

Investments

• Stocks
• Bonds and gilts
• Commodities
• ETFs
• Ready-made portfolios

Clare's says:

If your priority is keeping costs low, then InvestEngine is certainly a platform to consider. Account fees are just 0.15% and capped at £200 on the SIPP.

There's one downside; you can only invest in ETFs with InvestEngine. ETFs are exchange-traded funds – these are baskets of securities which are traded on stock exchanges in the same way individual stocks are. They can be structured to track the performance of a particular index, or a more specific sector, trend or market.

If you're looking for a diversified and low-cost option, you could find ETFs are a really good match for you.

There's a 0.25% additional fee to pay if you want a fully managed option, but that's still a pretty low overall cost for the peace of mind of having the professionals manage your investments for you.

If you prefer to take a DIY approach, you might be put off by the fact you've only got ETFs to choose from. However, with more than 590 ETFs on InvestEngine's menu, you'll not find yourself limited by a lack of choice.

Fees

• 0.15% capped at £200 p.a.
• Additional 0.25% if you choose a managed portfolio

Use this if

• You want to invest in ETFs
• Keeping costs at a minimum is a priority for you
• You want a quick and simple solution, with diversification built in

Investments

• Exchange-traded funds

Clare says:

If you're an experienced trader looking to open a SIPP, then IBKR could work well for you. Providing you feel at home on one of IBKR's trading interfaces, and you know how to get the best from the extensive research and execution tools, you can benefit from an exquisite choice of assets.

Although it's not a platform that's suitable for beginners, the excellent IBKR Campus offers a superb library of free, educational resources to help you master IBKR's products, services, markets and technology.

There is a problem with the IBKR SIPP, however, and that is that it is more complicated to set up than the SIPPs offered by competitors such as AJ Bell and Moneybox. That's because IBKR doesn't directly administer its SIPP itself: they use third party firms to do it instead. This could introduce friction into the set-up and account management process, and raise costs. IBKR offers a choice of administrators to use. A quick phone call to each suggests that you are looking at a minimum of £360 per year in administration fees, which makes this an expensive option for small pensions, but still a reasonable price for larger pots, particularly if you consider what you're getting access to in return.

You don't want to choose IBKR if you are seeking a simple SIPP that you can manage with a few clicks from an app.

Fees

IBKR's FX fees are impossible to beat at 0.002%.

Commissions are low across the board and, as there are no added spreads on top of commission, it’s possible to keep costs really low at IBKR.

Inactivity fee: $10 per month if your account is dormant for 24 consecutive months.

Withdrawal fees: IBKR allows one free withdrawal request per calendar month. After the first withdrawal, IBKR will charge £7 per bank transfer and £1 for a BACs transfer.

Use this if

• You are a seasoned trader and can handle a sophisticated trading platform
• You want access to vast array of tradable assets at very low prices
• Currency conversion fees are likely to make up a large proportion of your fees
• You're not put off by a more lengthy onboarding process and you're happy to use third party administrators

Investments

• Stocks
• Bonds
• Equity options
• Futures
• Futures options
• ETFs
• Spot currencies
• Warrants

You cannot trade CFDs within the IBKR SIPP.

Clare says:

Vanguard has won a Which? Recommended Provider accolade for four consecutive years since launching its SIPP in 2020.

With Vanguard, you only have access to Vanguard's own funds and ETFs – there's no individual stocks and shares to choose here – but there are plenty to choose from including the popular Vanguard Target Retirement Fund range. Our independent research into past performance of those ready-made portfolios that providers recommend, shows that Vanguard’s Target Retirement Fund range does very well against the industry average, producing median average returns of 88.1% over ten years (industry average: 66.8%). Always remember, however that past performance is not a guarantee of future performance and all investing involves risk.

On fees, Vanguard's account fee of 0.15% can reasonably claim to be the lowest of all the major investment providers. However, that doesn't include the fund fees and if you want a managed option, there's an extra fee for that too. A bit of number crunching shows that, while it is still a cheap option for those with smaller portfolios, it is far from the cheapest provider when you have a large pension invested. What's more, it is possible to invest in a Vanguard fund more cheaply through other providers as the Vanguard website isn't the only place you'll find them. Talking of websites, you'll have to be happy managing your account via the web as Vanguard doesn't have a mobile app.

Fees

• One low account fee: 0.15% p/a
• Low ongoing costs: 0.20% on average
• Account fees capped at £375
• Additional fee for managed service: 0.30%
• High minimum deposit: £500 lump sum / £100 p.m
• Fees are comparatively high for larger portfolios
• No dealing fees

Use this if

• You want a retirement fund that has performed well in the past
• You would feel reassured investing with a large, established brand
• You only want to invest in Vanguard funds

Investments

• Vanguard funds and ETFS

Clare says:

PensionBee makes setting up and saving into a pension as easy as it can possibly be. If you're someone who has been putting off getting a personal pension sorted, then PensionBee could be a good match as it effectively removes all the layers of complication and even makes tracking down and consolidating past workplace pensions a simple task.

The app is a joy to use and customer service is excellent. You won't be frustrated with a lack of communication or help – processes run smoothly and transparently.

PensionBee's pension isn't a SIPP – it's a personal pension. That means you won't get as much choice over how your savings are invested. There are just eight different funds to choose from. You might appreciate the lack of anxiety-inducing options if you're wanting to keep things simple. But for others this won't provide enough flexibility and freedom. You should also expect to pay a bit more for this kind of service, although for a personal pension, this one is competitively priced with a Tracker fund costing between 0.50% – 0.28% depending on how much you have to invest.

On performance, our independent research measured the performance of PensionBee's default option – the Tailored plan, managed by BlackRock. Performance isn't terrible (28.5% vs the industry average of 30.5%), but it is below the average and returns aren't as good as those produced by Moneybox, Vanguard and Plum. Remember, of course, that past performance does not guarantee future performance however.

Use this if

• You just want to get a pension sorted with as little stress as possible
• You're self-employed and don't have the time to research different retirement investment options
• You don't want too much choice and you want help choosing a pension fund
• You want to use a smart and well-designed app to monitor and manage your pension

Fees

• Relatively low annual fee
• For sums over £100k, rates are halved
• No minimum contribution
• Flexible contributions

Investments

• 8 x ready-made portfolio options: Tailored, Tracker, Fossil-fuel-free, 4-Plus, Impact, Shariah, Preserve, Pre-annuity

Dodl is an easy-to-use, no-frills investment app. As it’s been created by AJ Bell, you know you're getting a service that is highly secure and slick, and you get access to AJ Bell's extensive educational materials and competent customer service team.

The ultra-low 0.15% account fee – and zero dealing charges – means this is one of the lowest priced SIPPs on the market, and a good introduction to pension saving if you are yet to get off the starting blocks but know you should get something set up.

For some people, however, Dodl will be too basic and pared back. The choice of assets is very limited – just 80 individual stocks and seven AJ Bell funds are available. If you don’t want too many decisions, then this limited menu of options may well be a pleasant relief, and a contrast to the confusing complexity of other platforms. But if you have ambitions to grow as an investor, and learn to trade using sophisticated tools and strategies, you'll outgrow Dodl.

Fees

• Ultra-low account fees – 0.15%
• No dealing charges
• Free to open an account and withdraw money
• £100 lump sum minimum deposit (or £25 for monthly deposits)
• FX fees: 0.75% – 0.25%

Use this platform if

• You want to get a pension started without being overwhelmed by choice, or bamboozled by jargon
• You're happy to choose investments from a more limited menu of choices
• You want a low cost pension but still value good customer service

Investments

• UK and US stocks
• Funds
• ETFs
• Ready-made portfolios