Compare · Workplace pension vs Personal pension
Workplace pension vs personal pension — what's the difference?
In short. A workplace pension comes with an employer contribution (usually 3% minimum) and is set up by your employer under auto-enrolment. A personal pension is one you arrange yourself — no employer match, but full control over the provider and investments.
Most UK employees aged 22 to State Pension age earning £10,000+ are auto-enrolled into a workplace pension. The headline difference is the employer contribution: 'free money' you don't get from a personal pension. Personal pensions exist alongside, not instead of — most people use both.
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Side by side
| Criterion | Workplace pension | Personal pension |
|---|---|---|
| Who sets it up | Your employer | You (with a pension provider) |
| Employer contribution | Minimum 3% of qualifying earnings | None |
| Your minimum contribution | 5% of qualifying earnings (incl. tax relief) | Your choice |
| Tax relief | At your marginal rate | At your marginal rate |
| Investment choice | Limited to scheme's fund range; usually a default lifestyle fund | Wide — full SIPP gives access to funds, shares, ETFs, trusts |
| Charges | Capped at 0.75% on default funds in auto-enrolment | Vary — platform + fund charges, often 0.3–1.0% combined |
| When you can access | 55 (rising to 57 in April 2028) | 55 (rising to 57 in April 2028) |
When Workplace pension usually wins
- You're employed and eligible for auto-enrolment
- You want the employer match (always take the full match available)
- You prefer a default 'do it for me' option
- You want low charges without shopping around
When Personal pension usually wins
- You're self-employed, a director, or not auto-enrolled
- You want full control over investment choice
- You're consolidating old pension pots in one place
- You want to top up beyond your workplace scheme
FAQ
- Should I opt out of my workplace pension?
- Opting out means losing the employer contribution and tax relief — generally a significant cost. Information only, not advice.
- Can I pay into both a workplace and a personal pension?
- Yes. The combined contributions across all your pensions are subject to the annual allowance (£60,000 for most people in 2026/27) and your relevant earnings.
- What happens to my workplace pension if I leave the employer?
- It stays in your name. You can leave it, transfer it to a new employer's scheme, or transfer it into a personal pension or SIPP — there are pros and cons to each.