Family Wealth Management: Should You Still Consider a Pension Plan If You’re Already Investing?

“I’ve started investing in ETFs. Do I still need a pension plan?”

This was a question I received from a 23-year-old reader. And it’s a question I believe many financially-savvy young professionals are asking—especially those who are thinking ahead and want to retire early.

And while it may seem like an either-or situation—your own investments versus a pension plan—there’s a lot more to it when we look at it through the lens of family wealth management.

Here’s the back story…

This reader had started investing in early 2025. His portfolio already included the S&P 500, STOXX600, Vanguard FTSE All World ETF, and even a bit of gold. He had also allocated a small portion of his portfolio to more speculative investments like nuclear power and crypto-related stocks, all while applying a disciplined dollar-cost averaging strategy.

He reached out with a few concerns that I believe many can relate to:

• Do I still need a pension plan if I’m investing regularly?
• What are the tax implications of my unrealised gains?
• How should I withdraw funds in retirement?
• And… can I really trust these apps like Trading212 with my future?

Let’s dive into each—through the frame of long-term family wealth building.

What role does a pension play in your family wealth management plan?

You’re 23. You’ve got time. But time, as you already know, is the most powerful asset in building wealth—not just for you, but for your future family.

A pension plan is not a replacement for your investments. It’s a layer. A tool. A strategy that might not seem urgent now, but could play a significant role in your long-term financial architecture.

Here’s why some investors choose to integrate pensions into their plan:

✔ The benefits:

• Tax credits: In Malta, contributions to a private pension plan are eligible for a 25% tax credit, capped at €750 annually.
• Built-in discipline: Pensions are locked in until retirement age. This can be a blessing in disguise—removing the temptation to dip into them for spontaneous expenses.
• Structure for future family responsibilities: If you’re planning to raise a family, having multiple income streams at retirement—including one from a pension—can increase your security and reduce the pressure on your investments alone.

✖ The drawbacks:

• Fees: Private pensions typically carry higher costs than ETFs—some exceeding 1.5%–2% in annual charges.
• Limited flexibility: You’re often locked into portfolio templates (Cautious, Balanced, Aggressive), and many plans don’t include US equities, which have historically outperformed.
• Withdrawal restrictions: Typically, you’ll access 30% as a lump sum; the rest is paid out through an annuity.

So, is it a must-have? Not necessarily. But if you’re thinking in terms of family wealth management, having a pension can be a wise addition—especially if you’re the type who likes structure, incentives, and predictability.

What about taxes?

You asked about unrealised gains. The simple answer is: you only pay tax when you realise them (i.e. when you sell). That said, dividends may still be taxable depending on your residence status and income level.

It’s always best to consult a licensed tax advisor on this one. As a financial coach, I can guide on strategy—but not compliance.

Withdrawing at retirement: lump sum or gradual?

This comes down to one thing: your needs.

Some prefer to take lump sums every year to fund large goals or travel. Others withdraw a smaller amount monthly—almost like paying themselves a salary.

If you’re managing your own portfolio, the key is ensuring your drawdown strategy protects your principal while still covering your needs.

Again, thinking about family wealth management, your decisions at retirement shouldn’t just be about you. They might also involve:

• Supporting a spouse
• Helping children with education
• Structuring inheritance or trusts

Planning for these requires more than just number crunching—it needs intention.

Is Trading212 safe in the long run?

It’s regulated by the FCA, so yes—your investments are held with a custodian, which protects you even if the platform itself collapses. Still, it’s a valid concern.

As your wealth grows, diversification should apply not just to your assets, but to your platforms too.

One option is to split your portfolio between two or more regulated brokers. This reduces the risk of dependency on one company.

The bottom line

You’re already doing the hard part—investing early, thinking long-term, staying consistent.

But family wealth management isn’t just about growing money. It’s about creating a foundation that supports your future lifestyle, protects the people you love, and gives you peace of mind.

A pension plan won’t replace your ETF portfolio. But for some, it can enhance it.

It’s not a yes or a no—it’s a how does this fit into the bigger picture of my life?

Ready to build a plan that works for your life?

If you want help creating a family wealth management strategy that blends pensions, investments, and real-life needs.

Let’s talk. I’ve helped many clients in their 20s and 30s design personalised plans that grow with them over time.

📅 Book a free discovery call and let’s map it out together.

———————— About the Author: Luca Caruana

Let’s talk and start transforming your financial future today.