5 Alternative Ways to Invest for Your Pension Beyond a Standard Workplace Scheme
Published 20th of August 2013·Updated 3 April 2026
Reviewed by: Reviewed for accuracy April 2026
Most UK workers rely on a workplace pension as their primary retirement saving, but there are additional ways to build wealth for later life. A Self-Invested Personal Pension (SIPP), property investment, peer-to-peer lending and alternative assets such as art or collectibles can all supplement a workplace scheme. Each carries different levels of risk and requires different levels of knowledge.
Short Summary
A SIPP gives you control over where your pension money is invested and is tax-efficient: contributions receive tax relief at your marginal rate, meaning a basic-rate taxpayer effectively pays £80 for every £100 invested.
Property investment can provide rental income and capital growth, but it is illiquid and involves significant ongoing responsibilities as a landlord.
Alternative assets such as art and collectibles have produced strong long-term returns for knowledgeable investors, but they are high-risk, unregulated and unsuitable for most people as a primary retirement strategy.
Peer-to-peer lending platforms in the UK are regulated by the FCA, but they carry real credit risk. Capital is not protected by the Financial Services Compensation Scheme (FSCS) in the way a bank deposit would be.
If you are unsure which approach suits your situation, an independent financial adviser (IFA) regulated by the FCA can assess your full circumstances. You can find one at unbiased.co.uk.
What is a SIPP and how does it work?
A Self-Invested Personal Pension (SIPP) is a pension wrapper that allows you to choose your own investments from a wide range, including shares, funds, bonds and commercial property. Unlike most workplace pensions, which limit you to a small menu of funds chosen by your employer, a SIPP lets you build a portfolio that reflects your own risk appetite and investment views.
SIPPs are available from providers including Hargreaves Lansdown, AJ Bell, Vanguard and Interactive Investor. Contributions attract tax relief at your marginal income tax rate: basic-rate taxpayers get 20 per cent relief automatically, while higher-rate and additional-rate taxpayers can claim further relief through self-assessment. You can access a SIPP from age 57 (rising from 55 to 57 in 2028).
SIPPs involve investment risk. The value of investments can fall as well as rise and you may get back less than you invest. Taking regulated financial advice before setting up a SIPP is wise, especially if you plan to make large transfers from existing pension schemes.
Is property a good way to save for retirement?
Buy-to-let property has historically provided both rental yield and long-term capital growth in the UK. Gross rental yields in most UK cities currently range from 4 to 8 per cent per year, according to Zoopla data, though net returns are lower after mortgage interest, maintenance, letting agent fees and periods of vacancy.
The tax treatment of buy-to-let income has become less favourable since 2017. Mortgage interest relief is now restricted to the basic rate of 20 per cent for individual landlords, and any profit is taxable as income. Additional-rate taxpayers and those who own multiple properties should model the tax position carefully before investing.
Property is also illiquid: you cannot sell part of it quickly if you need cash. This makes it less suitable as a sole retirement strategy. A commercial mortgage broker or specialist property accountant can help you assess whether the numbers work for your situation.
How does peer-to-peer lending work as a retirement investment?
Peer-to-peer (P2P) lending platforms such as Funding Circle match your money with businesses or individuals seeking loans. You earn interest on the money you lend. FCA-regulated P2P platforms are required to meet certain standards around credit assessments and disclosures to investors.
Returns on P2P lending have historically ranged from 4 to 10 per cent per year depending on the risk level of the loans you fund. However, your capital is not protected by the FSCS, so if a borrower defaults and the platform's provision fund is insufficient, you may lose some or all of the money in those loans.
P2P lending is best treated as one component of a diversified retirement strategy rather than a primary savings vehicle. The FCA requires P2P platforms to carry out appropriateness assessments to check that investors understand the risks.
Can art or antiques form part of a retirement portfolio?
Art and antiques have produced strong returns for knowledgeable collectors over decades. The AMR All Art Index suggests long-term average returns of around 5 to 7 per cent per year for the broader art market, though individual results vary enormously.
The challenge is that these are illiquid, uninsured by the FSCS, costly to store and authenticate, and highly dependent on specialist knowledge. Buying at a gallery, reputable auction house such as Christie's or Sotheby's, or through an established dealer reduces the risk of purchasing fakes or overpriced work.
For most people, art and collectibles are better treated as a passion investment rather than a structured pension strategy. They should not represent a significant share of your overall retirement savings unless you have deep expertise in the relevant market.
What are the main UK options for retirement saving?
| Option | Tax relief | FSCS protected | Access age | Key risk |
|---|---|---|---|---|
| Workplace pension | Yes (employer adds too) | Up to £85,000 per provider | 57 (from 2028) | Investment returns |
| SIPP | Yes | Up to £85,000 per provider | 57 (from 2028) | Investment returns |
| Stocks and Shares ISA | No (but growth tax-free) | Up to £85,000 | Any age | Investment returns |
| Buy-to-let property | No | No | Any age | Market, tenant, tax |
| Peer-to-peer lending | Via Innovative Finance ISA | No | Any age | Credit/default risk |
| Cash ISA | No | Up to £85,000 | Any age | Inflation erosion |
Frequently Asked Questions
What is the maximum I can contribute to a pension in the UK?
The annual allowance for pension contributions that attract tax relief is currently £60,000 per year (or 100 per cent of your earnings, whichever is lower). The allowance was raised from £40,000 in April 2023. If you have not used your allowance in the previous three tax years, you may be able to carry forward unused amounts. HMRC publishes current limits on gov.uk.
Can I have both a workplace pension and a SIPP?
Yes. Many people contribute to their employer's workplace pension to capture the employer contribution (which is effectively free money) and also pay into a SIPP for greater investment flexibility. Contributions to both count towards your annual allowance combined.
Is peer-to-peer lending safe?
FCA regulation means platforms must meet minimum standards, but your capital is genuinely at risk. Unlike a bank savings account, P2P loans are not covered by the FSCS. If the platform becomes insolvent or loan defaults exceed the provision fund's capacity, you could lose money. Only invest money you could afford to lose.
At what age can I access my pension in the UK?
Currently 55, rising to 57 in 2028. Accessing your pension before this age is generally not permitted without a serious ill-health exemption, and attempts to access pension funds early through unregulated schemes are often pension scams. The FCA and The Pensions Regulator both advise extreme caution if you are ever approached about early pension access.
Do I need a financial adviser to set up a SIPP?
You do not legally need one, but taking regulated advice is strongly recommended if you are transferring money from a defined benefit (final salary) pension or if the transfer value exceeds £30,000. The FCA requires that defined benefit transfers above £30,000 are accompanied by regulated advice. You can find a regulated IFA at unbiased.co.uk or the Personal Finance Society's directory.