What is the Difference Between Private Pension and Robo Advisors-Wikipedia of Finance-WikiFinancepedia

What is the Difference Between Private Pension and Robo Advisors


Are you thinking about retirement? Are you aware of your workplace pension scheme and you think it’s not enough to support you when you stop working? Well, there are a variety of ways to save money and develop an income source after retirement in the United Kingdom. Aside from the State Pension and the Workplace Pension, you can set up a private pension and generate an extra source of income.

Depending on your career and personal circumstances, this pension type may be beneficial to you and your future. It’s never too soon to start preparing for your retirement, no matter where you are in your career or how old you are. How much money would you require to retire at the age of 55? There is no simple answer since it all relies on your way of living.

Among the options you have available let’s focus on robo advisor and SIPP. Through the first you can set up a pension based on your specific goals and it can help you foresee your financial future through specific tools like Moneyfarm pension calculation. SIPP (self-invested personal pension) offers you a wide range of options to allocate your money. Moreover, it is quite lucrative since you can have some tax relief.

What is a Robo Advisors?

Most likely you have heard about robo advisors. What you might not know yet is that this option is not just related to investments, but can also adapt to pensions. What is it, exactly? A robo advisor is a computer that is able to elaborate and provide financial strategies and planning in an automated way.

The human intervention on it is minimal. This approach is based on particular software and some algorithms that can construct and run your portfolio. Building one may be a challenging endeavour, especially if you are new to the process.

To minimize the hazards you may face, you will need sound expertise and a significant length of time for management. Technology can assist you in determining where to invest, which sectors to allocate your money, and how to diversify your assets.

This is where robo advisors may help. It’s an alternative if you want to get started quickly and don’t have much expertise to rely on. A robo advisor comes up with a variety of other services, from account setup to portfolio construction and maintenance, as well as sound goal planning and robust security measures.

All of this is provided to clients at a much lower cost than the same service provided by a “human” professional. Most robo advisors do not charge transaction fees, whereas a traditional brokerage account charges a fee for each transaction, whether you purchase or sell.

What is a Self-Invested Personal Pension

SIPP is an abbreviation that refers to self-invested personal pension. It’s a form of pension that allows you to manage and start your retirement planning resources on your own. Stocks and shares, UK government bonds, bonds issued by other governments, gold IRA companies, commercial properties, unit trusts, ETFs, and much more are all options available to you.

This is a highly beneficial choice since you may deduct donations up to 100% of your yearly income and it is applicable up to a maximum of £40,000 for the current tax year 2021-2022. SIPPs are a customizable and straightforward way of putting money down for retirement.

It’s the ideal solution for folks who don’t want to rely on a pension business to make decisions for them. Maybe you’re one of these individuals, or you are just willing to acquire knowledge to become a prudent investor. Either way a SIPP may be a valuable option for you, since you will have control over your money and be able to manage it on your own or with the assistance of a financial advisor of your choice.

According to the amount contributed up to that point, a self-invested personal pension will give certain advantages. It is by taking into account how long the money has been invested, fees charged, returns, and more. However, you should always remember that opening a SIPP is an investment and just like every other kind of investment it involves risks.

A Robo Advisors for Your Pension

The pension schemes with a robo advisor are thought of and elaborated with the specific goal of trying to guarantee safety in the financial future of the holders. At the beginning you need to provide the information about the age you want to retire.

Then you will get a portfolio built around that date. Robo advisors may help you get as much out of your pension strategy as possible. If the pension scheme is not clear enough, you can count on the help of a financial advisor.

Moreover, if you are interested in this option but you have set a pension with a provider, you can easily switch. It is quite a common procedure nowadays. You can just contact the new provider you have identified and it will take care of everything for you. Depending on your provider, the procedure might take up to 3 or 4 weeks.


Some people might find it hard to invest. Because of ETFs, it’s easier than ever to get help with your money from a professional because they’re so cheap. Many financial advisors and professional account managers who specialize in retirement planning have given you more choices when it comes to investing. The rise of robo-advisors is going to change the way people invest, but there are a few things you should think about before you use them in your retirement planning.

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