AJ Bell pension review

AJ Bell is one of the UK’s biggest and longest-established investment companies, and was one of the first to offer SIPPs to a wide retail audience. Read on to find out how it compares with rival pension providers for fees, features and more.

What is AJ Bell?

AJ Bell is an investment company with headquarters in Manchester. It’s been in business for more than 25 years, and has more than 500,000 investment customers.

Alongside its personal pension products, AJ Bell also offers cash savings, various types of ISAs and a general investment account (GIA). You can read more about what the full platform has to offer in our full, in-depth AJ Bell review.

How does the AJ Bell pension work?

AJ Bell offers two types of personal pensions: a full self-invested personal pension (SIPP) and a “ready-made” pension, which it launched in early 2024. Personal, or “private pensions” are schemes that you set up yourself, separately from your state pension and any workplace pension.

A SIPP is a type of pension where, rather than the pension provider setting up and managing your pension, you are in full control of what assets make up your pension portfolio. You’re responsible for choosing the assets in the first place, monitoring performance, and deciding if and when you want to buy and sell. You can do this completely yourself or, if you wish, pay a financial adviser to do so on your behalf.

Or, if you want to avoid the hassle of managing your own pension (or the cost of paying an adviser to do so), with AJ Bell’s more traditional ready-made portfolios means you simply choose one of its 4 growth funds. AJ Bell’s in-house experts then manage your pension on your behalf so, bar the occasional check in to make sure your pension is performing as expected, you can take a hands-off approach.

As of October 2024, the ready-made pension is only available to new customers, and you can’t hold a SIPP and a ready-made pension at the same time.

Fees and costs for AJ Bell pension

Fees for AJ Bell’s ready-made pension

If you opt for AJ Bell’s ready-made pension you’ll pay a single annual “all-in” charge of either 0.45% or 0.6% of the value of your pension.

This charge will be taken from your fund on a monthly basis. There are no additional charges to pay; it’s free to switch your investment to a different fund, or transfer your pension to another provider.

Fees for AJ Bell’s SIPP

Charges for AJ Bell’s SIPP are a bit more complicated, as they depend on the specific assets you hold in your portfolio. There are two main types of fee:

• Annual account charges. If you have a shares account (which also includes ETFs, investment trusts, gilts and bonds), you’ll pay 0.25% of the value of your holdings, up to a maximum of £10 a month. If you have a funds account (including unit trusts OEICs and structured products), the annual account charge is tiered depending on the value of your assets:
• 0.25% for holdings between £0 and £250,000
• 0.1% for holdings between £250,000 and £500,000
• No charge for holdings over £500,0000
• Dealing charges. You’ll pay £1.50 for buying or selling funds, and £5 for buying or selling shares (which is fairly high compared with some rivals). Share dealing charges are reduced to £3.50 if you had 10 or more deals in the previous month.

As with AJ Bell’s ready-made pension, there are no fees to transfer your SIPP account to another provider. However, you may also incur a few other charges, including:

• Foreign exchange (FX) fees for international dealing
• Additional dealing charges may apply if you make trades by telephone (rather than online), or apply for non-standard investments (such as IPOs)

Investment options with AJ Bell pension

AJ Bell ready-made pension investment options

If you opt for a ready-made pension, you have 4 growth funds to choose between:

• Cautious. Most contributions are invested in lower-risk (but also lower potential reward) assets such as cash and bonds, with only a relatively small amount invested in higher-risk company shares.
• Pension builder. A mid-risk portfolio comprising a more even balance between lower and higher-risk investments.
• Adventurous. By placing the majority of investor contributions into higher-risk investments such as company shares, this fund increases your chance of higher returns, but also holds the risk of bigger losses.
• Responsible growth. This has a similar balance of higher and lower risk funds to the Adventurous fund, but with a bias towards assets with stronger ESG (environmental, social and governance) credentials.

AJ Bell SIPP investment options

AJ Bell’s SIPP gives you access to a wide range of investment assets, including:

• Stocks and shares. Also known as equities, you can trade stocks from across 24 international markets, including Canada, the US, Japan, and much of Europe – as well as the UK, of course.
• Funds. These are collective investments that give you exposure to multiple companies and/or indices at once. Passive funds track a market or index (such as the FTSE 100), while active funds are run by a professional fund manager and try to beat the market (though they don’t always succeed).
• Bonds and gilts (government bonds). Bonds are essentially loans to organisations, in exchange for which you’re paid a pre-agreed rate of interest.
• Investment trusts. This is basically a company that trades like a stock listed on the London Stock Exchange (LSE), but it invests in a collection of other companies (public or private).
• Exchange-traded funds (ETFs). This is a type of investment that invests in a basket or collection of stocks and can be traded on the stock exchange in the same way as shares.

It’s up to you what types of asset you include in your portfolio, and in what proportion. The right balance for you will depend on lots of things, including your appetite for risk, your ethical viewpoint, and how close to retirement you are.

How can you manage the AJ Bell pension?

• Update contact details such as your address or phone number (if you need to update your name, or have made a mistake when entering a key piece of information such as your date of birth, you’ll need to contact AJ Bell’s customer services).
• Manage your communication preferences.
• Send secure messages to AJ Bell’s customer service team.
• Buy and sell investments, including setting up regular investments, or use trading order types (like limit orders, and stop loss orders).
  View the performance and current value of your pension portfolio.
• Create a watchlist, to monitor the performance of assets that you’re interested in.

Transferring a pension to AJ Bell

AJ Bell allows transfers-in of most types of UK pension. You might want to consider this if AJ Bell offers lower charges than an existing pension scheme, or you just want to consolidate lots of smaller pots into a single scheme.

To initiate a transfer, the first step is to open an AJ Bell pension. As part of the application, you’ll be asked for details of the account you want to transfer, including the account number and approximate value of your holdings. You should be able to find these details on the most recent statement from your current provider. Occasionally, AJ Bell might ask you to send it supportive information by post.

Once it has all the information you need, AJ Bell will handle the transfer for you and keep you posted on progress. Transferring can take anything from a few weeks to a few months, depending on the types of investment held in your existing pensions.

If you’ve got lots of small pension pots that you want to consolidate, but can’t lay your hands on the details, AJ Bell also offers a free pension finding service for its customers.

While transferring most defined contribution pension schemes is usually straightforward, in some cases it’s a good idea to think twice – and possibly take financial advice – before doing so. These include pension schemes with special benefits, such as guaranteed annuity rates, and defined benefit pension schemes (that pay out a guaranteed income for life). If you’re thinking of transferring a defined benefit pension worth £30,000 or more, you’re obliged to speak to a financial adviser before doing so.

Regardless of the type of pension you’re thinking of transferring, check whether it charges any exit fees to leave it. AJ Bell will pay up to £500 to cover exit fees when you move over an account worth £20,000 or more.

Is AJ Bell safe?

AJ Bell is part of the AJ Bell Group, which is a financially secure and regulated public company. AJ Bell Securities Limited is a member of the LSE and is regulated by the Financial Conduct Authority (FCA).

It complies with the rules and guidelines of the FCA and is subject to review in the form of individual interviews, document review and deep-dive visits.

Your money is held in FCA approved banks and is protected under the FCA rules. Under AJ Bell you are also covered by the Financial Services Compensation Scheme (FSCS) protection, which means you could claim up to £85,000 if AJ Bell was to go bust.

AJ Bell customer service and reviews

AJ Bell provides lots of ways for its customers to get in touch, including phone (open 8am to 7pm Monday to Friday and 10am to 2pm on Saturdays), post, email and web chat.

The platform scored well for its overall service (not just its SIPP) in Finder’s 2024 customer satisfaction survey; 95% of customers said they’d recommend it to a friend.

And on reviews site Trustpilot, AJ Bell has an impressive rating of 4.8 out of 5 “Excellent” score, based on more than 6,000 customer reviews (as of October 2024), with recent positive reviews highlighting good customer service. Again, this score is for its overall service rather than specifically for its pensions, but the handful of reviews that mention its pension or SIPP are largely positive.

Among the relative minority of negative reviews, there was no particular theme to be singled out, with criticisms ranging from out of date processes to technical issues to disappointing customer service. To its credit, AJ Bell responds to all negative reviews, and typically in less than 24 hours.

Who is the AJ Bell pension suited to?

With full SIPPs like AJ Bell’s, pension holders are fully responsible for making their own investment decisions, which will in turn determine how your pension performs. This kind of personal pension is typically better suited to more experienced investors, rather than beginners.

With the introduction of its ready-made pension, AJ Bell has opened up its offering to those looking for a more straightforward option, which might appeal to those new to investing. It’s a shame that, as of

October 2024, there isn’t the flexibility to split your pension holdings across its ready-made portfolios and its full SIPP, but perhaps this will come in time.

If you’re not sure what kind of pension is right for you, it’s a good idea to get financial advice first. You can pay a regulated financial adviser for tailored advice. For more general, free guidance on the options available, you can contact the government’s MoneyHelper service.

Frequently asked questions

• Who can open an AJ Bell pension?

  You can open and pay into an AJ Bell SIPP if you are under 75 and either resident in the UK, or working abroad with UK earnings.

• What are the contribution limits for an AJ Bell pension?

  For most people, the maximum you can contribute annually across all the pensions you hold (including your AJ Bell SIPP) and still benefit from pension tax relief as of the 2024/25 tax year is 100% of your annual salary or £60,000 (whichever is lower).

  There are no legal restrictions to paying in more, but any contributions above this limit won’t be eligible for tax relief.

• How do you open an AJ Bell pension?

  You can open an AJ Bell SIPP online, and it should take around 15 minutes. You’ll need to provide a few details, including:

  • Your contact details
  • Your National Insurance (NI) number
  • Your debit card details (if you want to put cash into your pension)
  • Details of any existing pensions you want to transfer to AJ Bell.

  As part of the application, you’ll need to read the SIPP terms and conditions and make sure you understand the risks and key features.

  You can pay into your SIPP by making a lump-sum contribution of at least £500, or setting up a regular monthly payment of at least £25 a month.