Group Personal Pensions

If you’re an employer looking to offer a workplace pension, or an employee wanting to understand how your company pension works, a group personal pension (GPP) is one of the most common options available, so it’s worth understanding.

Here, we explain what a group personal pension is, how it works, the pros and cons, examples of UK providers, how it compares to a group SIPP, and where to get unbiased independent advice.

What is a group personal pension?

It’s a type of workplace defined contribution (DC) pension arranged by an employer, but owned and controlled (within certain limitations) individually by each employee.

Although it’s set up through the workplace, each member has their own personal pension contract with the provider. Contributions are paid in by the employer and employee, and the pension pot belongs to the individual, not the company.

Group personal pensions are widely used by UK employers to help meet auto-enrolment requirements and provide a structured, tax-efficient way for employees to save for retirement.

How do they work?

A group personal pension works in a similar way to other workplace pension schemes:

• The employer selects a pension provider and sets up a group scheme.

• Eligible employees are enrolled into the scheme and receive their own personal pension plan.

• Contributions are paid in regularly by the employee and the employer.

• Money is invested in funds chosen from the provider’s available range.

• At retirement, each member decides how and when to draw down or access their pension pot.

Most group personal pensions offer default investment options, such as target date retirement funds, for employees who don’t want to make active investment decisions, alongside alternative funds for those who want more choice.

Why choose a group personal pension plan

Group personal pensions are a popular option because they strike a balance between simplicity and flexibility for employers and employees.

For employees, group pension plans offer:

• A straightforward way to build retirement savings

• Automation with deductions from your payslip

• Option to use salary sacrifice

• Employer contributions on top of personal contributions

• Tax relief on pension contributions

• Ownership and the ability to transfer if you change jobs

• Flexible ways to access your pension in retirement

For employers, group personal pension schemes can be attractive because they:

• Are widely recognised and easy to set up and administer

• Help meet company auto-enrolment obligations

• Can be tailored with contribution structures and investment options

• Offer a professional workplace benefit without excessive complexity

• Can reduce employer NI costs with salary sacrifice

• Extensive range of providers and products

How to open a group pension scheme

Group personal pensions are usually set up by employers, not individuals. The process typically involves:

1. Speaking to an adviser about your company’s requirements and needs

2. Choosing a suitable pension provider

3. Deciding contribution levels, structure and eligibility criteria

4. Setting up payroll integration

5. Enrolling eligible employees into the scheme

If you’d like to speak with an independent, FCA-regulated adviser who specialises in group personal pensions to review existing plans, compare providers, and ensure the scheme remains appropriate as the business grows, you can get started below.

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Group personal pension pros and cons

Like any pension arrangement, group personal pensions have advantages and disadvantages.

Pros

• Simple and widely understood workplace pension structure

• Employer contributions boost retirement savings

• Basic tax relief can be applied automatically

• Option to use a salary sacrifice system

• Usually lower charges than bespoke pensions

• Suitable for most employees regardless of investing experience

Cons

• Limited investment choice compared to SIPPs

• Less flexibility for experienced investors

• Provider controls the fund range

• May not suit higher earners with complex planning needs

• Group personal pension plans often aren’t bespoke or tailored

• Advice and support are usually required to access some providers

Examples of group pension providers

Many well-known UK insurers and financial organisations offer group personal pensions, including:

• Standard Life

• Aegon

• Royal London

• Aviva

• Friends Life (now part of Aviva)

• Scottish Widows

• AXA

• Prudential

• PwC (typically administered through Aviva)

• Legal & General

• Nationwide (via Aegon)

• HSBC

• Zurich

However, the best group pension provider for you to use will depend on the needs of your business and employees.

For example, factors such as fees, investment range, ease of administration, the level of support you need, and employee demographics can all play a role in finding the right fit.

Group personal pension vs group SIPP

While both are workplace pension arrangements, group personal pensions and group self-invested personal pensions (SIPPs) serve different needs:

• Group personal pension: Generally more suitable for the majority of employees and employers who want a simple, cost-effective pension with limited investment involvement.

• Group SIPP: Offers much wider investment choice and greater control, but usually comes with higher costs and increased complexity. Group SIPPs are often aimed at directors, senior staff, or higher earners.

In some cases, it may be possible to transfer a group SIPP into a group personal pension, particularly if an employee wants a simpler structure or is leaving a role where the group SIPP was offered.

However, this should always be reviewed carefully by an expert to ensure no valuable benefits or flexibility are lost.

Speak to a regulated independent pension adviser today

Choosing the right workplace pension is an important decision for both employers and employees, and the wrong structure can lead to unnecessary costs or limited retirement options.

Here’s why people trust us to help them get advice on group personal pensions:

• Our advisers are independent and FCA-regulated

• Free initial pension chat with no obligation to proceed further

• Tailored guidance for employers and employees

• Pension specialists with experience setting up workplace schemes

If you’d like a free, no-obligation chat with a qualified pension adviser about group personal pensions, you can get started here.