How to compare pensions to find the right one

By Pippa Thompson

Finding the right pension may not seem like a chore, after all, they are all pretty much the same aren’t they?

Actually, no not at all, and if you think that one pension is exactly like any other, you could be paying much more than you realise for your retirement savings.

But how do you go about finding the right pension for you when – like cars – they all work in much the same way, but have different bells and whistles that can add costs that you may not even realise you are paying?

So, here are some questions you should be asking about your pension to ensure you get the right one.

My employer is offering me my pension, so I should just go with that one right?

Yes, but do not take things at face value. If your employer has agreed a deal with a pension provider that means all employees are offered a pension and the company is paying into the scheme for you as well, then that is likely to be much more beneficial for you than not having those additional payments.

But if the pension chosen by your employer has higher charges then it is worth speaking to your employer directly or the HR department to see what options you have. If the company will make contributions to another scheme you have personally instead, you could get the best of both worlds. If not, then it makes sense to ask them if they would consider moving to a different provider to reduce the costs, which would help your colleagues too.

What should I look for in a good pension provider?

A good pension provider needs to be a number of things – a financially strong company with a good history, good administration and customer services back up, excellent investment fund choices that offer you a range of asset options, and one that does not charge a high amount for running your pension fund for you.

What will I be charged by the company managing the pension?

Charges made by different providers vary considerably, and it is important to understand how much of your pension contributions will be taken by the company providing your pension each year.

The amount of money a pension provider takes as an annual management fee – which comes directly out of your pension fund each year – can have a significant impact on how much money you will have at retirement. For example, a 45-year-old woman wanting to retire at 65 with a typical pension pot of £45,000 could lose more than £10,000 just because of the additional fees, based on an annual charge of 1.5% compared to just 0.64%, and assuming the fund grows at 2.5% a year.

Do I have to do all this work on my own?

No, and for most people it is sensible not to. You can get advice on finding the best pension for you – including the option of transferring if you already have a pension – by getting independent financial advice.

Profile Financial will offer you a free pension review which compares all of the pension products on the market so you can find out whether you can get a better deal than you have right now. Just call 01772 977426 or visit

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The review, analysis, report and discussion with our IFA regulated adviser is free. Should you choose to then take our advice and choose Profile to administer the transfer of your pensions, then an agreed fee will be applicable for the transfer only. Profile Financial Solutions Ltd is Authorised and Regulated by the Financial Conduct Authority. FCA Number 596398

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