Opening a personal pension when your workplace scheme is limited
Reviewed 5 June 2026. When and how to open a personal pension alongside a workplace scheme with limited fund choice or high charges.
Workplace pensions are a strong deal, mainly because of the employer contributions that come with them. But not every scheme is ideal. Some offer only a narrow range of funds, and some carry higher charges or give you little control over how the money is invested. If that describes yours, you can open a personal pension, such as a SIPP, to run alongside the workplace scheme.
Take the employer match first
Before anything else, contribute enough to your workplace pension to get the full employer match. That match is extra money for nothing, and almost nothing else beats it. Only once you have captured it does it make sense to think about where additional contributions go. Opening a personal pension is about adding to your workplace scheme, not replacing it and walking away from free money.
How a personal pension works alongside it
A personal pension gives you the same Income Tax relief as any pension. Pay in from your own bank account and basic-rate relief is added automatically, with higher and additional-rate taxpayers reclaiming the rest through a tax return. You can hold both a workplace pension and a personal pension at the same time. The annual allowance, £60,000 a year for most people, applies across all your pensions combined, not to each one separately.
One thing to be clear about: if your workplace scheme uses salary sacrifice, that route saves National Insurance as well as Income Tax, and a separate personal pension does not give the National Insurance saving. So if your scheme offers salary sacrifice, it is often worth using it up to the point that suits you before adding a personal pension on top.
If you are self-employed
With no workplace scheme, a personal pension or SIPP is usually the main way to save for retirement with tax relief. The same principles apply: keep costs low, choose investments that suit your timeframe, and contribute what you can sustain.
Choosing a provider
Once you have decided to open one, the choice of provider comes down to charges, investment range and how you will eventually take an income. Our guide on what to look for in a SIPP provider covers this in detail, and the Salary Sacrifice Calculator can show how workplace contributions compare with the take-home pay you give up.
Sources and useful reading
- GOV.UK: workplace pensions
- GOV.UK: tax on your private pension
- Your Wealth Calculator: methodology and assumptions
Common questions
A few questions that come up on this topic.
Should I open a personal pension instead of my workplace one?
Usually not instead, but alongside. Keep contributing to the workplace scheme at least up to the full employer match, then a personal pension can take additional contributions if the workplace fund choice or charges are poor.
Does a personal pension give the same tax relief?
Yes, the same Income Tax relief at your marginal rate. Basic-rate relief is added automatically, and higher or additional-rate taxpayers reclaim the rest. It does not give the National Insurance saving that salary sacrifice through an employer does.
How much can I pay into pensions in total?
For most people the annual allowance is £60,000 a year, and it applies across all your pensions combined, including employer contributions, not to each pension separately.
I am self-employed. What are my options?
With no workplace scheme, a personal pension or SIPP is the usual route, giving tax relief on contributions. Keep charges low and contribute an amount you can sustain through variable income.
This guide is general information for UK readers, not financial advice or a personal recommendation. It does not name or endorse any specific provider. The right choice depends on your own circumstances.
Investing involves risk. The value of investments and any income from them can go down as well as up, and you may get back less than you put in. Tax and pension rules can change.