Pensions

Pensions

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Starting a pension can be quite daunting for many people, even if they know that the sooner they start saving towards their retirement, the better off they will be in old age. It’s not something that most of us think that long or hard about when we’re young and just entering the workplace, and as we get older other expenses can often take  priority. These are just two of the reasons the Government introduced compulsory workplace pensions in 2012.  Here we’ll try to provide you with some of the basic information you need about pensions, the different types of pensions there are for example, how much you might need to save and  where to get advice as well as  some of the questions you should know the answers to before you embark on saving for your retirement.

DID YOU KNOW?

Student debt is rising; Students today graduate university with average debts of £50,800

Student debt is rising; Students today graduate university with average debts of £50,800

Student debt is rising; Students today graduate university with average debts of £50,800

TYPES OF PENSION

The number of different types of pensions available can make them rather confusing. Below we've done a bit of jargon busting to hopefully help you identify the different pensions there are.

Defined Benefit / Final Salary Pension

Defined Contribution Pension

Stakeholder Pension

Self-Invested Personal Pension

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Defined Contribution Pensions or DC Pensions involve you making a monthly contribution to your pension accumulating funds  in your pension pot over time. In the majority of cases today this is the type of pension that you will be offered by your employer, who will also contribution a percentage of your salary into your pension pot each month. The funds are  invested on your behalf through mutual funds, which buy shares in companies listed on stock markets around the world based on a particular strategy designed to increase the size of your pension pot until your retire. 

 

Stakeholder Pensions are a form of defined contribution personal pension. They have low and flexible minimum contributions, capped charges and come with an automatic default investment strategy, which is helpful if you are happy to leave things up to the pensions provider. Some employers offer them, but you can start one yourself.

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Resources

If you wnat to learn more about pensions or are looking for some additional information we haven’t covered here then you may find the websites below helpful.