how to compare pensions

Comparing Pensions: Where do I begin?



Posted on: 28th November 2019

Knowing how to compare pensions is not an easy task. It could even be so overwhelming that it might be putting you off the idea of transferring! But not to worry, Haven IFA is here to help. Here is our easy guide on how to compare pensions and what to look out for to help you make the best choice for your retirement.


With the introduction of pension freedoms, there are many options available for your pension income. These include drawdown and annuities. However, even if your provider offers both of these options, it is always worth shopping around at retirement to make sure you have the best deal possible. We would also recommend that you find out if your provider offers the ability to withdraw tax-free cash once you turn 55 should you wish to do so.

Fees and charges

You don’t want to miss out on your investment returns because of the steep charges you’re facing. You should ideally not be paying anything above 0.5 per cent in annual charges.

At the same time, hidden costs may be lurking in the fine print. For example, dealing charges could add up over time if you choose to take out regular transactions. Checking your annual pension statement will help you see how much you are paying if you are not sure, but this is something to check with potential pension providers when making comparisons.


It is always to make a decision based on the amount of risk you feel comfortable with. Remember, the higher the risk, the better the return if things work out in your favour. At the same time, a lower risk may mean a lower return, but you are far more likely to get something back from your investment.

Pension providers tend to show a “risk score” alongside the funds they have to offer. These will give you a good idea of the level of risk their funds come with. Alternatively, you can look at where proportions of these investments will go, such as shares, bonds and cash.

Remember, it is often a good idea to split your investments across numerous assets and sectors. This will offer better security should anything go wrong with a specific investment choice.

The financial stability of the pension provider

Companies go bust sometimes, but this certainly isn’t something you want from your pension provider and that’s why knowing how to compare pensions and providers is important. Checking how financially secure each provider is can help you to make the best decision. To do this, you can look at how each company is rated by independent credit rating agencies. These can identify how well a company would be able to cope based on numerous economic scenarios and possibilities. The highest rating you will find is AAA ratings and those who are considered to be vulnerable receive a B or CCC rating.

Funding options

It is also important to check which funds are being offered from different providers. While some offer quite a limited range of funds, others may provide a wider selection. Having numerous funding choices is important as it allows you to determine which is the best choice for your attitude to risk, as well as which have competitive charges. If you think you may need help with these decisions, Haven IFA can help.

Funding quality

You should also make sure that the funds you choose the one that gives you the best chance of growing your pension. Checking the quality of the fund can be done in numerous ways, such as Crown Ratings, which are designed to highlight the best performing funds when compared to their peers.

It may also be worth looking at 3-year and 10-year performance figures for any fund you are considering for your investments. But please note that the way in which a fund has performed in the past does not guarantee a positive performance in the future.

Make the best investment choices with help from Haven IFA

We understand that even comparing the pros and cons may not give you all the insight you need to make a decision for your pensions. This is why we highly recommend seeking independent financial advice. At Haven IFA, we are more than happy to discuss your goals for the future to help determine your best plan of action. Get in touch to find out more.