Pension top tips

Having a pension is a great way to put money aside for later life. Saving what you can afford each month could help you enjoy your retirement.

One of the main benefits of a pension is the tax relief that you receive. But it is worth noting that there are annual limits on how much tax relief you get on pension payments.

Your pension investments also generally grow free of UK tax (for example, no Capital Gains Tax to pay on investment growth). This means your pension could be a tax-efficient way to save for your future.

Speak to your employer. Auto-enrolment means most employed people in the UK should be automatically added into a workplace pension. If you work for yourself, or don’t qualify for your employer’s workplace pension, you can easily set up your own personal pension, such as our Ready-Made Pension.

While you may qualify for the State Pension, this may not be enough for you to enjoy your retirement. And without your own personal pension, you may have to be more cautious in retirement.

When saving for the future, it’s a good idea to find the right balance between contributing to short and long-term savings. A savings account is more accessible in the short term, but doesn’t get a boost from tax relief. However, your pension pot can benefit from UK tax-free savings and employer contributions and is only accessible from the age of 55 (rising to 57 in 2028).

Pensions are a type of long-term investment. It’s important to remember that, like any investment scheme, the value of your pension can go down as well as up over time. The earlier you start saving, the greater the chance for your investments to grow.

Like most providers, we’ll send you a statement every year. This includes an illustration showing the income you might get at retirement.

You can also use our retirement calculator at any time to help you see what you may get at retirement. You can also see how increased contributions or taking a smaller tax-free lump sum affect your annual pension income.

Paying into a pension earlier can bring benefits later down the line as it gives your investment more time to grow.

However, any age is a good age to start a pension – especially if your employer is offering to make contributions or match your own.

Having a personal pension can be even more important if you’re self-employed, as you’re the only one contributing to your retirement.

You won’t receive employer contributions, but you will benefit from a tax-relief boost. So, it’s worth calculating what you’ll need once you decide to retire. This includes how much you’ll have to contribute each month to reach your retirement goal.

No, you’re not required to have a personal pension. However, it can be a tax-efficient way of planning for your financial future.

You receive government tax relief when you pay into your pension. For example, if you pay in £80, HMRC will add an extra £20.

When you decide to withdraw from your pension, the first 25% is generally tax-free. The rest is taxed as income. This depends on the retirement benefits you take.

Don’t forget that tax treatment depends on your individual circumstances, and both your circumstances and tax rules may change in the future.

You must be at least 65 years of age to currently be eligible for the State Pension.

This will rise to 66 from April 2026, 67 by March 2028, before eventually increasing to 68 years old.

To receive any State Pension, you'll need at least 10 qualifying years of National Insurance contributions. And at least 35 years to receive the full State Pension.

The current full State Pension is £230.25 a week for 2025/26. However, what you receive depends on how much National Insurance you’ve paid while working.

To receive the full amount, you’ll need more than 35 years of qualifying National Insurance contributions.