Nutmeg Personal Pension: charges and managed portfolios

A Nutmeg personal pension is a private pension where Nutmeg chooses and manages the investments for you, rather than you picking funds yourself. You pay in regular amounts or lump sums, the money is invested in a portfolio matched to how much risk you are willing to take, and you can usually start most personal pensions from age 18 or open one on behalf of someone younger¹.

It sits in the same family as any other personal pension: a private arrangement you make with a provider, which invests your money and gives you an income in retirement². The difference between providers is mostly in how the investments are run, what the charges are, and how much control you have. With a managed pension, the fund choices are made for you.

This page covers what the Nutmeg pension offers, how its charges work in principle, who can open one, how transfers in and money out work, and what protects your money. Nutmeg's own site carries today's charges and portfolio details, and those figures change, so check there for current numbers.

What the Nutmeg Personal Pension offers

A personal pension is a private pension you arrange with a bank, building society, insurance company or unit trust, and it gives you a regular income in retirement². You pay regular monthly amounts or a lump sum to the provider, who invests it on your behalf². Other people and family members can pay into a personal pension on your behalf, which is useful if you want to top up a child's or partner's pot².

Nutmeg's version is a managed service: rather than choosing from a list of funds yourself, you answer questions about your circumstances and attitude to risk, and the provider builds and runs a portfolio for you. That is the main thing to understand about it. You are buying investment management and administration, not a self-directed platform.

Personal pensions can also be offered by employers as workplace pensions, so a Nutmeg pension could in principle sit alongside or instead of a workplace scheme⁶. If you are employed and your employer offers a workplace pension, you would normally be automatically enrolled into that scheme, and you can hold a personal pension as well. Whether it makes sense to hold both depends on what your employer contributes, which is a question about your own circumstances rather than about the product.

The pension is a long-term product. Money paid in is normally locked away until you reach the minimum age for accessing it, which is 55 now and rising to 57 from April 2028⁴. That is the trade-off for the tax treatment: contributions attract tax relief, and the money grows free of UK income tax and capital gains tax while it stays in the pension.

How Nutmeg pension charges work

Personal pension providers charge for starting and running your pension, and usually they take a percentage from your pension fund rather than billing you separately². That means the cost is deducted from the pot, so it reduces what is left to grow, and it rises in cash terms as your pot grows.

The percentage model is standard across the market. That figure is an average across workplace schemes and is not a quote for any particular provider; managed personal pensions with an investment service typically sit above the cheapest workplace arrangements because you are paying for fund management and administration as well as the wrapper.

There are two broad ways charges can be structured, and it helps to know which one applies to you:

• A percentage of the fund, taken regularly, which is the most common model for personal pensions².

Some providers also charge for specific actions, such as switching funds. Independent guidance notes that you will usually need to pay charges such as an annual management fee and a switching charge to your provider if you decide to change funds⁷. Others state they charge nothing for taking income, lump sums, switching investments or transferring to another provider⁸. The pattern varies, so the terms of the specific plan matter more than the headline rate.

Who can open a Nutmeg pension, including the self-employed

You can start most personal pensions from age 18, or open one on behalf of someone younger¹. Beyond the age rule, the question is usually whether a personal pension suits your situation.

Official guidance lists the circumstances where a personal pension may be suitable: you are self-employed and do not have access to a workplace pension; you are not working but can afford to pay into a pension; you want to save more for retirement; or your employer offers one as a workplace pension scheme².

The self-employed are the group most likely to be looking at this. If you are self-employed or a single-person company director, you do not have to enrol yourself in a workplace pension, and your options include a personal or stakeholder pension from various providers, or NEST⁹. NEST is a workplace pension scheme open to employers and self-employed people¹⁰. Self-employed people are not covered by the employer duties that apply to staff, so the responsibility for arranging anything sits with you⁷.

If you are employed, you may still open a personal pension alongside your workplace scheme. The practical difference is that an employer usually contributes to a workplace pension, while a personal pension is funded by you, with tax relief added by the government. Tax relief is the main incentive: contributions attract relief at your marginal rate, subject to the annual allowance rules.

Transferring old pensions into Nutmeg

Combining old pots into one pension is a common reason people look at a provider like Nutmeg. The process is standard across the industry, and official guidance sets out the steps you usually need to take³:

1. Check your current scheme allows transfers out.
2. Make sure you will not lose any benefits by moving.
3. Decide which scheme to transfer into.
4. Check whether you need to pay for financial advice.
5. Ask your current provider for a transfer value.
6. Ask the new scheme to start the transfer.

You can transfer your UK pension pot to another registered UK pension scheme³. Providers make it straightforward: Standard Life, for example, says you can usually do it online or by phone, providing the provider name, plan number and rough value of the old plan¹¹. PensionBee says it takes 12 weeks on average to process and transfer old pensions¹². Royal London says most transfers take 4 to 12 weeks, depending on the type of pension and your provider¹³. The FCA's own guidance is that a transfer often takes between two and six weeks, but your provider has up to six months to action your request¹⁴.

That gap matters. While a transfer is in progress, your money is usually still invested in the old scheme until it is sold and moved, so it is not sitting in cash the whole time, but it is also not yet in your new portfolio. If markets move during the transfer, you may buy in at a different price than you expected.

Before transferring, it is worth checking what you would lose. Some older policies carry guarantees or benefits that do not survive a move, and independent guidance notes that you might not be able to transfer if you have a share of an ex-partner's pension following a divorce, or a scheme with special features or guarantees like a Guaranteed Minimum Pension¹⁵.

Pensions Nutmeg cannot accept, and when advice is required

Not every pension can be moved into a managed personal pension, and some transfers require regulated advice before they can go ahead.

The clearest case is a defined benefit or final salary pension. If you are already receiving payments from a defined benefit scheme, you will not be able to switch to a defined contribution scheme¹⁶. If you are considering transferring a defined benefit pension to a defined contribution scheme, you will need to take financial advice first¹⁷. Some schemes will not accept transfers without advice whatever the value¹⁶.

Providers also apply their own rules. PensionBee, for example, says it will only accept a transfer requiring advice if the advice is given or checked by a Pension Transfer Specialist, with evidence of positive advice¹². That is a common condition across the market.

A transfer can also be declined for other reasons. Your provider could decline a transfer if it is concerned about a potential pension scam, if the receiving scheme does not meet certain requirements, or if additional information is needed¹³. Scam concerns are a genuine and frequent cause of delay, and they exist to protect you.

There is also a limit on what free guidance can do. General pension information services cannot tell you the best course of action or recommend specific products or investments¹⁸. A pensions primer should not be used to make individual pension decisions or as a substitute for professional financial advice¹⁹. If your transfer needs advice, that advice has to come from someone regulated to give it.

The Nutmeg pension transfer cashback and Avios offer

Two conditions do the work here. The first is the deadline: the transfer has to be registered by 26 November 2026. The second is the holding period: the funds must stay invested until 26 November 2027. If you move the money out before then, the offer terms are unlikely to be met.

Offers of this kind are common across the market, and they usually carry exclusions. Aviva, for example, excludes transfers of existing Aviva pensions from its own cashback offer²⁰. The pattern is that the incentive applies to money coming in from elsewhere, not to money already with the provider.

Taking money out: drawdown and tax-free cash

When you reach the minimum access age, you have choices about how to take money from a personal pension. The most common route is drawdown, where your pension stays invested and you take an income from it.

You can take up to 25% from your pension as a tax-free lump sum at any time from age 55, rising to 57 from April 2028⁴. You can take that as a single lump sum, or take 25% of each withdrawal tax-free²¹. Taking a series of lump sums directly from the pot, a bit at a time, is another option, with 25% of each withdrawal tax-free²¹.

The rest is taxable as income when you take it. That is why the order and timing of withdrawals matters: a large withdrawal can push you into a higher tax band for that year, while spreading withdrawals can keep more of each one below the threshold.

Drawdown carries risk that an annuity does not. As your pension remains invested, its value can rise and fall until you take the money, which means your retirement income is not guaranteed⁴. If markets fall early in your retirement and you are taking an income, the pot can be depleted faster than expected.

Money held in your pension usually cannot be claimed by anyone you owe money to, even if you are declared bankrupt or in a formal debt repayment plan⁴. Money you have taken out can be claimed. That is a reason some people leave money in the pension rather than withdrawing more than they need.

How your pension money is held and protected

The protection that applies to a personal pension depends on the type of product, not on the brand name on the statement.

Pension companies should ringfence your pension savings, which means that if they were to go bust, your pension would be safe²³. That is the first layer: your money is held separately from the provider's own assets.

The second layer is the Financial Services Compensation Scheme. FSCS can generally protect pensions that are provided by UK-regulated insurers, as long as they qualify as contracts of long-term insurance⁵. Where FSCS can pay compensation, it covers the pension at 100% with no upper cap⁵. Protection varies depending on the type of pension product, and there are limits to the amount that can be compensated²⁴.

The Pension Protection Fund is a different scheme and does not apply here. It was set up in 2005 to protect people if their employer, and its pension scheme, can no longer afford to pay promised benefits²⁵. It is funded by investment returns on the assets it holds²⁵. It covers defined benefit schemes, not personal pensions, so it is not the relevant protection for a Nutmeg pension.

If something goes wrong with the advice you were given, or with how a transfer was handled, there are routes to complain. The Financial Ombudsman Service handles complaints about transfers from personal pension arrangements²⁷. The Pensions Ombudsman investigates and resolves complaints and disputes about occupational and personal pension schemes²⁸. Both are free to use.

For free, impartial guidance on your options, Pension Wise offers a service covering adjustable income and taking your whole pot⁴. MoneyHelper provides general information on personal pensions¹. Neither can recommend a product, but both can help you understand what you are choosing between.