What’s the best managed SIPP? (2024)

Looking to save more for retirement? Great idea. You’ll need a pretty hefty pension these days to afford a comfortable retirement (we’ll cover how much you might need below).

Saving into a self-invested personal pension (one you set up yourself, often called a SIPP), is one of the best options to boost your total pension pot, and retirement income later down the line.

And, picking a SIPP where the experts handle things (an expert managed SIPP), is often the best idea too – the experts know what they’re doing, and typically grow pensions significantly over time.

But, they’re not all the same. We’ll run through all the details about managed SIPP below, but if you’re just here for the best, well, here they are:

Best managed SIPP providers

Where the experts take care of growing your pension.

Best self-managed SIPP provider

If you’d prefer to make your own investment decisions.

Our criteria for the best managed SIPP providers

You’ve made the best decision you can for your financial future, and that’s saving into a pension. There’s also one more big decision to make too, and that’s which managed SIPP provider (company) you’d like to use – and it can all be a bit of a mind field.

But don’t worry, that’s where we come in. We’ve reviewed all the best private pension providers out there to put together our list of the best managed SIPPs.

Here’s the main criteria we looked at:

• Expert managed investment options
• Ease of use
• Fees
• Customer service

There’s a fair few pension providers out there, and we’ve narrowed it down to ones we think are the very best – ones we recommend to our friends and family, and use ourselves here at Nuts About Money. So, whichever pension provider you choose, you can be confident you’re picking a great provider to help you save for retirement.

‍Nuts About Money recommendation: as a quick reminder, PensionBee¹ tops the list – it’s easy to use, has low fees and a great track record of growing pensions over time. We’ve also bagged you £50 added to your pension when you sign up with Nuts About Money.

What is a managed SIPP?

A managed SIPP, or expert managed SIPP, is where you simply let the experts manage the investments within your self-invested personal pension (SIPP). Sounds pretty simple right?

Note: they can sometimes be called a ‘ready made pension’ too.

Traditionally, a SIPP would be where you make all the investment decisions, you’d typically open a SIPP with a stock broker, and then you’d be able to pick from a wide range of investments (such as stocks and shares, which represent ownership of companies).

You can still do this too, although only recommended for experienced investors. And a great option is AJ Bell¹ (it’s low cost and a huge range of investment options).

Managed SIPPs are fairly new, and with a managed SIPP, you can still save into a SIPP and get all the amazing benefits of a personal pension (such as a 25% bonus on your contributions – more on all the benefits below), while letting the experts handle the investments.

It’s a win-win. You can benefit from the experts' knowledge and experience in investing, without having to know anything about investing yourself. You’ll save yourself loads of time too. Overall, it’s a great set up for a comfortable retirement.

You’ll typically pick from a limited range of investment options, all suited to long term saving, such as whether you’d like your money to be invested ethically (such as no fossil fuel companies). With our recommendations, all the options are easy to understand and explained when you sign up.

They’re low cost too (well the best ones are) – you’ll likely save more in fees than using a traditional SIPP and making your own investment decisions.

Nuts About Money tip: you can even get managed Stocks and Shares ISAs too – where you can save and invest tax-free, and let the experts do their thing (like a pension although you will be able to access your money whenever you need it). Learn more with our guide to the best managed Stocks and Shares ISAs.

What is a personal pension?

Before we get too far in, let’s just run through what a personal pension is – it’s a type of private pension, which is a personal all in your name (private to you), and you get to decide how much you’d like to save, and when you eventually withdraw from it (as long as you’re over 55). 

There’s two main types of private pensions, a personal pension, and a workplace pension…

A workplace pension is one you get from work if you’re employed, your employer will set it up for you, and take contributions out of your salary. They’ll also add 3% in themselves if you add 5% (by law), making them pretty great, and worth saving that 5%.

A personal pension is very similar, but one you set up yourself, so you get to decide which pension provider to use, and ultimately, where your pension is invested. That means you can pick a great pension provider, such as one that’s easy to use, has low fees and a great record of growing money (such as PensionBee¹ and Moneyfarm¹).

With a workplace pension, you’re stuck with whichever pension provider your employer chooses, and sometimes these aren’t the best. So, it can be a great idea to save the 5% into your workplace pension (to get the 3% from your employer), and then save into a personal pension, where you’re more in control.

Note: you can also transfer a personal pension to another provider whenever you like – you can’t do this with a current workplace pension until you leave your job (when you leave your job you can then transfer it to a personal pension, called a pension transfer).

The alternative to a private pension is the State Pension, which is what you’ll get at State Pension age (currently 66). You’ll need to have made at least 10 years worth of National Insurance contributions, and 35 years to get the full amount. 

The full amount is only £221.20 per week currently – so pretty low, and not enough to live on (it’s far less than the recommended minimum retirement income of £14,400 per year, explained below). 

And that’s where a private pension comes in – to help boost your pension pot, and they’re really great at it (explained in a second).

Nuts About Money tip: if you’re self-employed, a personal pension is your only option to save for retirement, but it’s a great one – and a managed SIPP is a great option. Here’s where to learn more about self-employed pensions.

Benefits of personal pensions

Here’s where things get pretty interesting – and not very well known. Personal pensions have some pretty amazing benefits to help save for your retirement.

25% government bonus

When you save into a personal pension, you’ll get a massive 25% bonus from the government added to everything you save. We’re not joking! This is called tax-relief and its aim is to refund you the tax you’ve paid, or will pay on your income (e.g. your salary), as pensions are intended to be tax-free.

And it gets better, if you’re a higher rate taxpayer (earning over £50,270 and paying 40% tax), or additional rate taxpayer (earning over £125,140 and paying 45% tax), you’ll be able to claim some of the tax you’ve paid at those rates too (which you can do on a Self Assessment tax return).

Money grows tax-free

Not only can you save into your pension tax free, but the money within your pension grows tax-free too – so it can grow much faster over time, and there’s no tax paperwork to worry about each year either.

When the time comes to withdraw it, 25% will be completely tax-free too, and you can take this as a tax-free lump sum if you like (all in one go). You might pay Income Tax on the remaining 75%, depending on how much you withdraw at the time (the same tax as your salary now).

No Inheritance Tax

There’s also a unique feature when it comes to pensions, it's not included as part of your ‘estate’ when you pass away (which is all of your possessions and money added together).

Your estate counts towards Inheritance Tax, which can be 40% on anything above £325,000.

Instead, your pension is its own thing, and doesn’t count. You can pass your pension onto whoever you choose too. 

And, if you sadly pass away under the age of 75, whoever receives your pension won’t pay any tax at all. If you pass away over 75, they might pay Income Tax on what they withdraw, it depends on their income at the time.

Pension limits

Before you get carried away and add all your cash into your pension straight away, there are some limits to be aware of.

You’ll only be able to save as much as your total income each year, or £60,000, whichever is lower. Although you can use the previous 3 years allowance if you haven’t used it all.

And, you won’t be able to access any of your cash until you’re at least 55 (57 from 2028). It’s for retirement after all! It’s a good idea to keep it growing for as long as possible (until you actually retire), so it can provide a large retirement income.

Can I transfer existing pensions?

If you’ve got any old pensions lying around collecting dust, you can transfer these over to your new managed SIPP, so they can keep growing in the way you’d like (with the right experts handling things).

You’ll likely want to do this too, as you don’t want to forget where your old pensions are when the time comes to retire (it happens a lot more than you think!). Having them all in one place can make managing your pension much easier, and they’ll all be with the pension provider you decide, such as one that’s easy to use, and with low fees.

It's simple to do, all you need to do is let your new pension provider know where your old pensions are, and they’ll sort everything out and transfer all the cash in your old pension over to your new pension. 

Nuts About Money tip: if you’re not sure where your old pensions are, try the government’s pension tracing service, or Gretel, a free service to find lost pensions.

How much do I need to save for retirement?

Here’s where things get a bit scary, you need to save a fairly staggering amount in your pension these days to give yourself a comfortable retirement. Let’s run through a quick overview of what you might need.

There’s 3 categories when it comes to retirement income (set by the Retirement Living Standards):

• Minimum: this covers the essentials, such as food and energy bills, and a tiny bit left over for yourself. You won’t be able to afford a car or any holidays outside of the UK.
• Moderate: this is a bit more for food and bills (£55 per week for food), and a bit more to run a cheap car.
• Comfortable: this gives you more freedom, with a budget for a longer holiday in Europe (3 weeks), and larger budget for food and clothing.

Note: housing costs such as rent and a mortgage are not included – it’s presumed a mortgage would be paid off. So, you’ll need to add these on top if you think you’ll have them.

Here’s the yearly income for each category:

Quite high figures for a retirement income aren’t they? And these are just guidelines, you’ll need to adapt them to your lifestyle, such as multiple holidays, a new car, and various hobbies you might have.

Even for the minimum yearly income, you’ll need a fairly large pension pot, and for comfortable, it’s very hefty. Let’s take a look:

Yikes. Don’t be put off though, a pension account (with all those tax saving benefits) can really grow over time.

You’ll also get the State Pension if you’ve paid enough National Insurance contributions over the years (more on that below).

With a managed SIPP, your money will be invested with the intention of growing it over time, by experts who know what they’re doing. Of course, it can go down in value, but invested wisely it should grow significantly over time.

It’s all down to something called compound interest, which is where the money your money makes, begins to make money too, and this compounds over and over.

For example, imagine you had £10,000 in your pension currently, and you were able to save £220 per month. If your pension grew by 7% per year, after 25 years, you’d have a massive £235,470! And just another 10 years, you’d have a whopping £511,294.

In just one year after that, you’d make £35,791! All sounds pretty great right?

The key is to start saving as soon as you can (and as much as you can), so the compound interest can work its magic.

And don’t forget, with a managed SIPP, you’ll get that juicy 25% government bonus on all your contributions, making it a lot easier. Your money will really add up by the time you retire, trust us!

Nuts About Money tip: if you’re not sure where to get started with a managed SIPP, check out PensionBee¹, it’s easy to use, has low fees and a great track record of growing pensions over time.

State Pension

You’ll likely also get the State Pension when you reach the State Pension age, which is currently 66. Providing you’ve made at least 10 years worth of National Insurance contributions, and 35 years to get the full amount.

The full amount is currently £221.20 per week (£11,502 per year). So a lot - as a reminder, it doesn’t cover the minimum amount recommended for retirement (£14,400). You’ll likely need a large private pension in addition to the State Pension.

What happens when I retire?

When the time comes to retire (and hopefully, you’ve built up a nice big pension pot), there’s a few options to consider.

You’ll be able to start withdrawing from your pension from the age of 55 (57 from 2028) if you want to.

With your pension pot (e.g. your managed SIPP), you’ll be able to take 25% of your pension out completely tax-free, however you like to take it – either as a lump sum, or as lots of individual withdrawals.

You might pay Income Tax on the remaining 75% depending on your income at the time. You’ll still have your Personal Allowance of £12,570 every year that you won’t pay any tax on (you get this with your current salary).

There’s two main choices when it comes to actually providing a retirement income too – you can either opt for pension drawdown, which is where you simply leave your pension pot where it is, and withdraw money from it as and when you like (e.g. monthly).

Or, you can opt for a pension annuity, where you trade your pension pot in for a guaranteed income for the rest of your life (or a set number of years).

You don’t need to decide now of course, and a financial advisor can help you make the right decision when the time comes. You can also learn lots more with our guide to drawdown vs annuity.

Nuts About Money tip: if you think you’d like to opt for pension drawdown, here’s our pick of the best pension drawdown providers.

Are managed SIPPs safe?

Yep, managed SIPPs are perfectly safe to save into.

All SIPP providers need to be authorised by the Financial Conduct Authority (FCA). They’re the people who make sure financial companies are looking after their customers and their money.

That also means your money is protected by the Financial Services Compensation Scheme (FSCS), which gives you compensation up to £85,000 should anything happen to the pension provider.

Although, your money is typically held with very large banks or financial companies, within the investments themselves, all in your name, and can only be returned to you (should anything happen to the pension provider, such as going out of business).

However, your money can go up and down in value over time. Although given enough time, it should grow very large indeed.

Let’s recap

There we have it – a rundown of the best managed SIPPs, and everything you need to know to set yourself up for a nice and comfortable retirement.

Managed SIPPs have so many benefits, such as the experts handling things for you, aiming to grow your pension a lot over time. And, being able to take advantage of all the great tax benefits, such as a massive 25% government bonus on everything you add, and your money growing tax-free.

Before you know it, you’re pension pot could be much larger than you ever imagined – the key is to get saving, and start as soon as you can.

In fact, why not start today? Our top pick is PensionBee¹, it’s easy to use, low cost and has a great track record of growing pensions over time. Plus, we’ve bagged you £50 added to your pension for free when you sign up with Nuts About Money.

There’s also Moneyfarm¹, who are great too, and can provide expert help if you’d like it.

For all the top options, check out the best private pension providers, and to learn more about making your own investments, here’s the best SIPP providers.

And that’s it. All the best for building a nice big pension!