What is a ready-made pension?
A ready-made pension hands the investing decisions to professionals. Instead of picking funds yourself, you choose a risk level (or a target retirement date) and the provider builds a diversified portfolio, rebalances it and adjusts the risk as you age. It's the middle ground between a hands-off workplace default and a fully DIY SIPP.
Ready-made pensions compared
| Provider | All-in cost | Style | Risk choices |
|---|---|---|---|
| Vanguard Target Retirement | ~0.24% | Index, auto-glidepath | By retirement year |
| Nutmeg Fully Managed | ~0.75% | Actively managed | 10 risk levels |
| Nutmeg Fixed Allocation | ~0.45% | Index, set mix | 5 levels |
| PensionBee | 0.50–0.95% | Single managed plan | Several plans |
| Moneybox | 0.45% + fund OCF | 3 simple options | Cautious/Balanced/Adventurous |
How to pick the right one
- Lowest cost: Vanguard Target Retirement funds at around 0.24% all-in, with an automatic glidepath that de-risks near retirement.
- Most hand-holding: Nutmeg Fully Managed, where a team actively adjusts holdings — at a higher price.
- Simplest app experience: PensionBee or Moneybox, both built around an easy mobile journey.
Active vs index ready-made plans
Nutmeg's Fully Managed and PensionBee's actively run plans aim to beat the market through manager decisions, but charge more. Index-based options like Vanguard Target Retirement and Nutmeg Fixed Allocation simply track markets at lower cost — and over the long run, low-cost index portfolios have generally held up well against active rivals.
Compare these with self-directed options in our best pension UK and best SIPP providers guides.
How target-date funds work
A target-date or target-retirement fund is the simplest ready-made option: you pick the fund matching roughly the year you plan to retire, and the manager handles everything else. Early on it holds mostly equities for growth; as the target year nears it automatically glides into bonds and cash to reduce volatility. Vanguard's Target Retirement range does this at around 0.24% all-in, removing the need to ever rebalance yourself. The trade-off is that the glidepath is generic and assumes you'll stop investing at the target date, which may not fit a drawdown plan.
Risk-rated ready-made portfolios
The alternative is a risk-rated range, where you choose a number from cautious to adventurous and the provider builds a matching portfolio. Nutmeg offers ten levels and Moneybox three, letting you align the investment mix with your own appetite for ups and downs. These don't automatically de-risk with age, so you may need to step down a level as retirement approaches, but they give more control over how much equity exposure you carry at any time.
Active vs passive ready-made plans
Nutmeg's Fully Managed and PensionBee's actively run plans employ teams to adjust holdings in response to markets, justifying fees around 0.75–0.95%. Passive ready-made options like Vanguard Target Retirement or Nutmeg Fixed Allocation simply track indices at 0.24–0.45%. Decades of evidence show that low-cost passive portfolios are hard for active managers to beat after fees, so unless you specifically want active management, the cheaper index route is often the pragmatic choice.
Is a ready-made pension right for you?
- Yes if: you want a diversified, professionally maintained portfolio without picking funds.
- Maybe not if: you enjoy investing and could build a cheaper portfolio yourself for under 0.20%.
- Watch: the all-in cost, since a managed plan's headline fee plus underlying fund costs can creep above 1%.
Model the impact of different growth rates with our pension calculator.
Getting the most from a ready-made plan
A ready-made pension works best when you treat it as genuinely hands-off. Choose a risk level or target date that honestly matches your timeline and temperament, set up regular contributions, and then largely leave it alone, letting the provider rebalance and de-risk as designed. The common mistake is to switch risk levels reactively after a market wobble, which locks in losses and undermines the whole point of delegating the decisions. Review annually rather than daily. As retirement approaches, check whether the plan's glidepath assumes you'll buy an annuity or use drawdown, and adjust if it doesn't fit your intentions. Ready-made plans are particularly valuable for people who would otherwise leave money sitting in cash out of uncertainty — getting invested in a diversified, professionally maintained portfolio is far more important to long-term outcomes than squeezing the last basis point off the fee. For those who genuinely enjoy investing, a DIY one-fund SIPP may be cheaper, but for everyone else, ready-made earns its modest premium.
Verdict
For value, Vanguard Target Retirement funds are hard to beat. For active management with a slick app, Nutmeg leads. For absolute simplicity, PensionBee and Moneybox win on ease at a modest premium.