Personal Pension
What is a personal pension?
A personal pension is a pension you arrange yourself, outside of work. You choose the provider, decide how much to pay in, and pick where to invest. The government still gives you tax relief on your contributions.
Why would you want one?
- Self-employed – no employer to set one up for you
- More control – choose your own investments instead of a default fund
- Top up beyond work – save more than your workplace pension allows
- Consolidation – gather old workplace pensions in one place
What’s a SIPP?
A SIPP (Self-Invested Personal Pension) is a type of personal pension with the widest investment choice. You can hold funds, shares, bonds, and more—similar to a Stocks and Shares ISA but with pension tax benefits.
Most personal pensions offered by banks and insurers are more limited, with a fixed menu of funds to choose from.
Personal pension vs workplace pension
A workplace pension comes with employer contributions—free money. A personal pension doesn’t. If you have access to a workplace scheme, use it first to get the employer match, then consider a personal pension for anything extra.
Key points
- You set it up yourself – no employer involved
- Still get tax relief – government tops up your contributions
- SIPP gives most choice – pick your own investments
- Use workplace pension first – don’t miss employer contributions