Always remember that investments can go down as well as up in value, so you could get back less than you put in. How you’re taxed will depend on your circumstances, and pension and tax rules can change.

Best Pension Providers - Private Pensions

Updated:
Oct 15, 2021
An alarm clock
Β· 6 min read
Best Private Pension Providers

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Contents:

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What is a Private Pension

Private pensions are pensions schemes that are not arranged by the government. There are two types of private pensions:

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  1. Personal pensions
  2. Workplace pensions

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In this article, we cover what a personal pension is, types of personal pensions, tax relief on personal pension, how to choose a personal pension, best private pension providers and more. If you are interested in workplace pensions, click here to learn more.

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What is a Personal Pension

A personal pension is a type of private pension that you arrange yourself.

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Like all pensions, the money you pay into a personal pension is put into investments (such as stocks and shares) by the pension provider.

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And depending on your investing savviness, you can either choose the individual stocks and shares that make up your pension pot or have your pension provider do it for you.
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Pension contributions are tax-free up to certain limits. You'll pay tax if you:

  • Contribute more than Β£40,000 in one year - this is your annual allowance, and you can usually carry forward any unused allowance for up to three years.
  • Contribute more than 100% of your earnings in one year.
  • Exceed your lifetime allowance - Β£1,073,100 in your lifetime.

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You usually can't access the money in your pension pot until you are 55 (increases to 57 in 2028) when you can take 25% as a tax-free lump sum.

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Why choose a Personal Pension

If you don't have a workplace pension, a personal pension could be a great way to save for retirement. And even if you have a workplace pension, a personal pension in addition to your workplace pension could be a great way to grow your retirement savings faster.


Personal pensions are especially great for people who:

  • Are self-employed,
  • Do not qualify for a workplace pension, or
  • Have a workplace pension but want to save into a private pension plan separate from their workplace pension.

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Types of Personal Pensions

There are two types of personal pension:

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  1. Self-invested Personal Pension (SIPP)
    A SIPP gives you the flexibility to choose the specific investments that make up your pension fund. Depending on your pension provider, you'll have the option to either select individual investments and manage your portfolio yourself or choose from a range of ready-made portfolios.

    A ready-made portfolio is a diverse mix of investments created by fund managers to help reduce the burden of choosing individual investments. With one ready-made portfolio, you could have access to hundreds of investments.
    ‍
  1. Stakeholder Pension
    A stakeholder pension is a type of personal pension that must meet minimum standards set by the government.

    These minimum standards include:
  • ~~Capped charges,
  • ~~Free transfers,Β 
  • ~~Low minimum contributions,
  • ~~Flexible contributions (you can stop and start payments when you want), andΒ 
  • ~~A default investment fund (if you don't want to choose investments).

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Due to their flexibility, stakeholder pensions can be of particular benefit if you're self-employed, on a low income, or not working.

Another way to save into a pension is with a Lifetime ISA. A Lifetime ISA is open to adults aged 39 or younger and lets you save up to Β£4,000 a year towards your first home or retirement. The government will add a 25% bonus to your savings every year up to a maximum of Β£1,000 per year.

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Tax Relief on Personal Pension

The government will add money to your pension contributions in the form of tax relief (free money).


For every Β£80 you put into your pension, the government adds Β£20 - and you can claim an extra Β£20 if you're a higher earner.


You can think of tax relief as a refund of the tax you originally paid on your pension contribution, at your usual rate of income tax - 20%, 40%, or 45%.Β 


It's your pension provider who claims this tax relief at the basic rate and adds it to your pension. Tax relief for higher rate taxpayers is slightly different. If you're a higher rate taxpayer, you'll need to claim the additional rebate through your tax return.

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How to choose a Personal Pension

  1. Shop around for pension providers before you make any commitment. Go to each provider's website you are interested in and take a look at the investments and types of services they offer. Ask for the key features document for each pension plan you are considering.
  2. Consider pension charges carefully. Charges may include administration fees, fund management costs, transfer charges, and penalties for missed payments. Be sure to check what charges you'll have to pay and when.
  3. Check that your pension provider is registered with the Financial Conduct Authority (FCA) or the Pensions Regulator if it's a stakeholder pension. The FCA or the Pensions Regulator regulates all of the pension providers listed on Koody.
  4. If you are unsure or need some guidance, get proper advice from a regulated independent financial adviser.
  5. Beware of scammers. If something sounds too good to be true, it most likely is. Also, if someone shows you a way to withdraw your pensions before you are 55, it's most likely a pension scam. You can learn more out about pension scams on the Pension Wise website.


Best Stakeholder Pension Providers

Compare some of the best stakeholder pension providers below:

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You usually can't access the money in your pension pot until you are at least 55 years old (increases to 57 in 2028) when you can take 25% as a tax-free lump sum.

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Capital at risk. Other charges may apply.

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Aviva - Ready-made

Aviva's Logo
Product‍
Stakeholder Pension
Account Type
Ready-made
Minimum Contribution‍
Β£20 per month
Annual Fund Management Cost
‍
Capped at 1%

Aviva lets you start your Stakeholder Pension with as little as Β£20 a month. And you can change that amount or stop and start payments when you need to.

GO TO SITE

Standard Life - DIY & Ready-made

Standard Life
Product‍
Stakeholder Pension
Account Type
DIY & Ready-made
Minimum Contribution‍
Β£16
Annual Fund Management Cost
‍
Capped at 1%

Standard Life offers straightforward investment options. You can choose from two strategic lifestyle profiles, which invest your money in funds and moves them as you get closer to retirement. If you don't want to choose a fund, that's fine too. Standard Life will automatically invest your money into a Lifestyle Profile.

GO TO SITE

Best Pension Providers

Compare some of the best pension providers below.

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You usually can't access the money in your pension pot until you are at least 55 years old (increases to 57 in 2028) when you can take 25% as a tax-free lump sum.

‍

Capital at risk. Other charges apply.

‍

Interactive Investor - One free trade every month; Lots of research

Interactive Investor
Product‍
SIPP
Account Type
‍
DIY & Ready-made
Minimum Contribution‍
Β£0
Annual Platform Fee‍
Β Β£240 (Β£19.99 per month)

Interactive Investor has more than 40,000 investments to choose from, including UK and overseas shares, funds, investment trusts, and ETFs. You get a free trade every month, which you can use to buy or sell any investment. It also has several ready-made funds and expert ideas to make it easy to choose investments. Interactive Investor charges a flat fee of Β£19.99 (Platform + SIPP fee) per month, so you know exactly how much you will be paying each month.

Special offer: Open a SIPP and pay no SIPP admin fee for 6 months. Terms apply.

GO TO SITE

Hargreaves Lansdown - Lots of investment options, research and tips

Hargreaves Lansdown
Product‍
SIPP
Account Type
‍
DIY & Ready-made
Minimum Contribution‍
Β£100 lump sum or Β£25 per month
Annual Platform Fee‍
0.45% - 0% (Funds)
0.45% (Shares - max Β£200/year)

Hargreaves Lansdown has thousands of investments to choose from, including UK and overseas shares, funds, investment trusts, and ETFs. Choose your own investments with expert research and ideas to help you, or simply pick a ready-made portfolio. Manage via website, app or phone. Hargreaves Lansdown also offers Stocks and Shares ISA, Lifetime ISA, Junior ISA, and Fund and Share Account. These services are intended for investors happy at making their own decisions. Capital at risk. Other charges apply.

GO TO SITE

AJ Bell Youinvest - Mid-price range; Lots of investment options

AJ Bell Youinvest
Product‍
SIPP
Account Type
‍
DIY & Ready-made
Minimum Contribution‍
Β£1,000 lump-sum. No minimum for a regular payment
Annual Platform Fee‍
0.25% - 0% (Funds)
0.25% (Shares - max Β£10/month)

If you are confident about picking your investments, AJ Bell Youinvest has thousands of investments for you to choose from, including shares, funds, investment trusts, and ETFs. And you can manage them online or with its mobile app. If you need help choosing, it has four ready-made portfolios and other investment ideas. AJ Bell Youinvest does not offer advice. Capital at risk. Pension rules apply.

GO TO SITE

Moneyfarm - Mid-price range; Offers advice and ESG investments

Moneyfarm Logo
Product‍
SIPP
Account Type
Ready-made
Minimum Contribution‍
Β£500
Annual Platform Fee‍
0.75% - 0.35%

Moneyfarm is a UK robo advisor that provides you with a personalised investment plan based on your risk preferences. It has seven globally diversified risk-rated portfolios, including ethical investments. The team at Moneyfarm actively manages your investments, so you can be sure you've got a good mix of hard-working assets handpicked from around the world. You also benefit from free and personalised digital financial advice from Moneyfarm's investment consultants, and you can chat, phone, email, or meet your consultant in person. Tell Moneyfarm when you aim to retire, and it will manage your portfolio around your target retirement date - reducing your risk as the date approaches. Moneyfarm's products include Stocks and Shares ISA, General Investment Account, and Personal Pension.

GO TO SITE

Vanguard - Low cost, capped at Β£375 per year

Vanguard Investor'
Product‍
SIPP
Account Type
DIY & Ready-made
Minimum Contribution‍
Β£500 lump sum or Β£100 per month
Annual Platform Fee‍
0.15% (max Β£375/year)

Vanguard is a popular low-cost investment platform with over 70 funds. It gives you the flexibility to choose a ready-made portfolio or build your own. Vanguard's products include SIPP, Stocks and Shares ISA and Junior ISA.

GO TO SITE

Aviva - Stakeholder Pension - Ready-made

Aviva's Logo
Product‍
Stakeholder Pension
Account Type
Ready-made
Minimum Contribution‍
Β£20 per month
Annual Fund Management Cost
‍
Capped at 1%

Aviva lets you start your Stakeholder Pension with as little as Β£20 a month. And you can change that amount or stop and start payments when you need to.

GO TO SITE

Standard Life - Stakeholder Pension - DIY & Ready-made

Standard Life
Product‍
Stakeholder Pension
Account Type
DIY & Ready-made
Minimum Contribution‍
Β£16
Annual Fund Management Cost
‍
Capped at 1%

Standard Life offers straightforward investment options. You can choose from two strategic lifestyle profiles, which invest your money in funds and moves them as you get closer to retirement. If you don't want to choose a fund, that's fine too. Standard Life will automatically invest your money into a Lifestyle Profile.

GO TO SITE

Best Pension Providers for Self-employed People

Compare some of the best pension providers for self-employed people below:

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You usually can't access the money in your pension pot until you are at least 55 years old (increases to 57 in 2028) when you can take 25% as a tax-free lump sum.

‍

Capital at risk. Other charges apply.

‍

AJ Bell Youinvest - Mid-price range; Lots of investment options

AJ Bell Youinvest
Product‍
SIPP
Account Type
‍
DIY & Ready-made
Minimum Contribution‍
Β£1,000 lump-sum. No minimum for a regular payment
Annual Platform Fee‍
0.25% - 0% (Funds)
0.25% (Shares - max Β£10/month)

If you are confident about picking your investments, AJ Bell Youinvest has thousands of investments for you to choose from, including shares, funds, investment trusts, and ETFs. And you can manage them online or with its mobile app. If you need help choosing, it has four ready-made portfolios and other investment ideas. AJ Bell Youinvest does not offer advice. Capital at risk. Pension rules apply.

GO TO SITE

Hargreaves Lansdown - Lots of investment options, research and tips

Hargreaves Lansdown
Product‍
SIPP
Account Type
‍
DIY & Ready-made
Minimum Contribution‍
Β£100 lump sum or Β£25 per month
Annual Platform Fee‍
0.45% - 0% (Funds)
0.45% (Shares - max Β£200/year)

Hargreaves Lansdown has thousands of investments to choose from, including UK and overseas shares, funds, investment trusts, and ETFs. Choose your own investments with expert research and ideas to help you, or simply pick a ready-made portfolio. Manage via website, app or phone. Hargreaves Lansdown also offers Stocks and Shares ISA, Lifetime ISA, Junior ISA, and Fund and Share Account. These services are intended for investors happy at making their own decisions. Capital at risk. Other charges apply.

GO TO SITE

Interactive Investor - One free trade every month; Lots of research

Interactive Investor
Product‍
SIPP
Account Type
‍
DIY & Ready-made
Minimum Contribution‍
Β£0
Annual Platform Fee‍
Β Β£240 (Β£19.99 per month)

Interactive Investor has more than 40,000 investments to choose from, including UK and overseas shares, funds, investment trusts, and ETFs. You get a free trade every month, which you can use to buy or sell any investment. It also has several ready-made funds and expert ideas to make it easy to choose investments. Interactive Investor charges a flat fee of Β£19.99 (Platform + SIPP fee) per month, so you know exactly how much you will be paying each month.

Special offer: Open a SIPP and pay no SIPP admin fee for 6 months. Terms apply.

GO TO SITE

Moneyfarm - Mid-price range; Offers advice and ESG investments

Moneyfarm Logo
Product‍
SIPP
Account Type
Ready-made
Minimum Contribution‍
Β£500
Annual Platform Fee‍
0.75% - 0.35%

Moneyfarm is a UK robo advisor that provides you with a personalised investment plan based on your risk preferences. It has seven globally diversified risk-rated portfolios, including ethical investments. The team at Moneyfarm actively manages your investments, so you can be sure you've got a good mix of hard-working assets handpicked from around the world. You also benefit from free and personalised digital financial advice from Moneyfarm's investment consultants, and you can chat, phone, email, or meet your consultant in person. Tell Moneyfarm when you aim to retire, and it will manage your portfolio around your target retirement date - reducing your risk as the date approaches. Moneyfarm's products include Stocks and Shares ISA, General Investment Account, and Personal Pension.

GO TO SITE

Vanguard - Low cost, capped at Β£375 per year

Vanguard Investor'
Product‍
SIPP
Account Type
DIY & Ready-made
Minimum Contribution‍
Β£500 lump sum or Β£100 per month
Annual Platform Fee‍
0.15% (max Β£375/year)

Vanguard is a popular low-cost investment platform with over 70 funds. It gives you the flexibility to choose a ready-made portfolio or build your own. Vanguard's products include SIPP, Stocks and Shares ISA and Junior ISA.

GO TO SITE

Aviva - Stakeholder Pension - Ready-made

Aviva's Logo
Product‍
Stakeholder Pension
Account Type
Ready-made
Minimum Contribution‍
Β£20 per month
Annual Fund Management Cost
‍
Capped at 1%

Aviva lets you start your Stakeholder Pension with as little as Β£20 a month. And you can change that amount or stop and start payments when you need to.

GO TO SITE

Standard Life - Stakeholder Pension - DIY & Ready-made

Standard Life
Product‍
Stakeholder Pension
Account Type
DIY & Ready-made
Minimum Contribution‍
Β£16
Annual Fund Management Cost
‍
Capped at 1%

Standard Life offers straightforward investment options. You can choose from two strategic lifestyle profiles, which invest your money in funds and moves them as you get closer to retirement. If you don't want to choose a fund, that's fine too. Standard Life will automatically invest your money into a Lifestyle Profile.

GO TO SITE

Frequently Asked Questions

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1. Is it worth paying into a private pension?

A private pension can be a great way to boost the savings in your pension pot and provide you with more income than the State Pension in your retirement years.


Tax benefits from a private pension means that any money you put towards your pension will be increased through tax relief, which puts more money in your pocket and less towards government taxes.


These benefits continue when you retire. Once you reach retirement age, you can take 25% of your pension fund as a tax-free lump sum. The remaining funds will then be paid to you as income and taxed at normal levels.


It’s important to keep in mind that tax benefits from a private pension don’t apply to everyone. The best way to determine whether or not a private pension is right for you is to speak to a regulated financial adviser.


2. How much can I pay into my pension each year?

You can pay 100% of your earnings into your pension every year up to a maximum of Β£40,000. Any contribution above this will be taxed.

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3. How much can I pay into my pension tax-free?

Private pension contributions are tax-free up to certain limits.Β 


You’ll usually pay tax if the savings in your pension pot exceed the following limits:

  • 100% of your annual earnings - this is the limit on claimable tax relief
  • 40,000 a year - this is what the annual allowance is currently capped at
  • Β£1,073,000 in your lifetime - this is the current lifetime allowance


Pension schemes must be registered with HMRC to qualify for tax relief. You can check with your pension provider if you’re unsure whether your scheme is registered or not.

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4. Can I have a private pension and a workplace pension?

Yes, you can. Getting a private pension in addition to your workplace pension could be a great way to grow your retirement savings faster.

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5. Can you withdraw money from a private pension?

You usually can't cash in your private pension pot before you're 55 (increases to 57 in 2028), but there are some rare cases where you can, e.g., if you are too ill to work or if you have a severe illness, which means you're expected to live for less than a year.


In the case of the State Pension, the earliest you can get that is when you reach your State Pension age. If you're currently aged between 20 and 39, your State Pension age will likely be 68. If you retire before this age, you'll have to wait to claim your State Pension.

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6. Can I take my pension as a lump sum?

Yes, you can. When you turn 55 (increases to 57 in 2028), you can take 25% of your pension pot as a tax-free lump sum.

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7. What is a good pension contribution?

10% of your annual gross income is a good pension contribution, but the more you save into your pension, the better.


Most financial advisers recommend saving at least 10% of your income before tax towards your retirement. 10% might seem like a lot, but remember that it includes tax relief from the government and employer contributions if your employer contributes.Β 


When deciding how much to contribute, remember to consider how old you'll be when you retire, your preferred retirement lifestyle, and the average number of years people spend in retirement. Have a play with the Money Advice Service's Pension Calculator to work out how changing your pension contributions at your age will affect your total retirement savings.Β 


If you have more questions, ask the community!

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8. What is a group personal pension plan?

A group personal pension (GPP) is a collection of individual pension plans arranged by an employer for its employees. If you’re enrolled onto a GPP, you can use it to build up a personal pension fund that will provide you with an income for when you retire.


As an employee, you’ll typically be enrolled onto a pension scheme automatically. It’ll be run by a pension provider that your employer chooses, but your individual pension contract will be between you and the provider.


In a GPP, your pension pot builds up through contributions made by both you and your employer, investment returns and tax relief.


You might also like πŸ€“

  1. Best Pension for Self-employed People
  2. Stakeholder Pension vs SIPP
  3. Best Stakeholder Pension Providers
  4. Workplace Pension
  5. Introduction to Pensions
  6. Best Stocks and Shares ISA

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Credits

  1. Gov.uk
  2. Money Advice Service
  3. Citizens Advice


Best SIPP Providers

Compare some of the best SIPP providers in the UK below.

‍

You usually can't access the money in your pension pot until you are at least 55 years old (increases to 57 in 2028), when you can take 25% as a tax-free lump sum.


Capital at risk. Other charges apply.

‍

Interactive Investor - One free trade every month; Lots of research

Interactive Investor
Product‍
SIPP
Account Type
‍
DIY & Ready-made
Minimum Contribution‍
Β£0
Annual Platform Fee‍
Β Β£240 (Β£19.99 per month)

Interactive Investor has more than 40,000 investments to choose from, including UK and overseas shares, funds, investment trusts, and ETFs. You get a free trade every month, which you can use to buy or sell any investment. It also has several ready-made funds and expert ideas to make it easy to choose investments. Interactive Investor charges a flat fee of Β£19.99 (Platform + SIPP fee) per month, so you know exactly how much you will be paying each month.

Special offer: Open a SIPP and pay no SIPP admin fee for 6 months. Terms apply.

GO TO SITE

AJ Bell Youinvest - Mid-price range; Lots of investment options

AJ Bell Youinvest
Product‍
SIPP
Account Type
‍
DIY & Ready-made
Minimum Contribution‍
Β£1,000 lump-sum. No minimum for a regular payment
Annual Platform Fee‍
0.25% - 0% (Funds)
0.25% (Shares - max Β£10/month)

If you are confident about picking your investments, AJ Bell Youinvest has thousands of investments for you to choose from, including shares, funds, investment trusts, and ETFs. And you can manage them online or with its mobile app. If you need help choosing, it has four ready-made portfolios and other investment ideas. AJ Bell Youinvest does not offer advice. Capital at risk. Pension rules apply.

GO TO SITE

Hargreaves Lansdown - Lots of investment options, research and tips

Hargreaves Lansdown
Product‍
SIPP
Account Type
‍
DIY & Ready-made
Minimum Contribution‍
Β£100 lump sum or Β£25 per month
Annual Platform Fee‍
0.45% - 0% (Funds)
0.45% (Shares - max Β£200/year)

Hargreaves Lansdown has thousands of investments to choose from, including UK and overseas shares, funds, investment trusts, and ETFs. Choose your own investments with expert research and ideas to help you, or simply pick a ready-made portfolio. Manage via website, app or phone. Hargreaves Lansdown also offers Stocks and Shares ISA, Lifetime ISA, Junior ISA, and Fund and Share Account. These services are intended for investors happy at making their own decisions. Capital at risk. Other charges apply.

GO TO SITE

Moneyfarm - Mid-price range; Offers advice and ESG investments

Moneyfarm Logo
Product‍
SIPP
Account Type
Ready-made
Minimum Contribution‍
Β£500
Annual Platform Fee‍
0.75% - 0.35%

Moneyfarm is a UK robo advisor that provides you with a personalised investment plan based on your risk preferences. It has seven globally diversified risk-rated portfolios, including ethical investments. The team at Moneyfarm actively manages your investments, so you can be sure you've got a good mix of hard-working assets handpicked from around the world. You also benefit from free and personalised digital financial advice from Moneyfarm's investment consultants, and you can chat, phone, email, or meet your consultant in person. Tell Moneyfarm when you aim to retire, and it will manage your portfolio around your target retirement date - reducing your risk as the date approaches. Moneyfarm's products include Stocks and Shares ISA, General Investment Account, and Personal Pension.

GO TO SITE

Vanguard - Low cost, capped at Β£375 per year

Vanguard Investor'
Product‍
SIPP
Account Type
DIY & Ready-made
Minimum Contribution‍
Β£500 lump sum or Β£100 per month
Annual Platform Fee‍
0.15% (max Β£375/year)

Vanguard is a popular low-cost investment platform with over 70 funds. It gives you the flexibility to choose a ready-made portfolio or build your own. Vanguard's products include SIPP, Stocks and Shares ISA and Junior ISA.

GO TO SITE
Koody Man with Laptop

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