What is a pension?
It is a type of income you get when you retire. The amount you get depends on how much you contributed to your pension fund during your working life.
The three main types of pension are:
This is also known as a workplace pension and usually comes in two schemes:
Defined contribution: You and your employer contribute when you get paid which determines how much of an income you get when you retire.
Defined benefit: Your employer guarantees your pension amount based on your length of service and salary.
If you are a UK resident and have made National Insurance contributions throughout your life you should qualify for a State Pension.
There are two types of State Pension, and the one you get depends on when you retire:
New State Pension: Retire after 6th April 2016
Basic State Pension: Retire before 6th April 2016
Self Invested Personal Pension (SIPP)
You can open and manage a Self Invested Personal Pension without any help from an independent financial adviser or pension company representative.
Make sure you understand the risks of investing in a SIPP before you invest, or speak to an independent financial adviser to discuss your options.
How much can I pay into my pension?
As much as you want, but only a proportion of your contributions each year will be tax free. Find out more information on pension tax here.
Can I withdraw from a pension?
It depends on your pension type, but you could face tax charges if you try to withdraw earlier than your retirement age. Find out more here.
Can I manage my own pension?
Yes, you can monitor the performance of most pensions whenever you like. Find out how to manage your pension here.
Can I transfer my pension?
Some workplace pensions and SIPPs can be transferred, but make sure you consider any charges for doing so. This guide explains more.
Does my employer need to pay into my pension?
Yes, but only if you are an eligible employee and work for an employer who has reached their auto enrolment date. Find out more information here.