What is a Pension?

Want to know more about pensions?

What is a pension?

Pensions are a long-term investment that helps you save for your retirement in a tax-efficient way. The retirement benefits you receive from your pension plan will depend on a number of factors including the value of your plan when you decide to take your benefits which isn't guaranteed, and can go down as well as up. The value of your plan could fall below the amount(s) paid in.

The Government will normally give you tax relief that helps increase the value of your plan. If the basic rate of tax is 20%, for every £80 you pay into your plan each month, the Government will automatically top up your pension with an additional £20. Your tax relief may depend on your main place of residence in the UK as advised by HMRC for each tax year. If you are a Scottish or Welsh taxpayer, the relief you will be entitled to will be at the Scottish or Welsh rate of income tax, as applicable. If you pay tax on some of your income at a rate higher than the amount we add automatically, you can claim additional tax relief via your self-assessment tax return. Tax depends on individual circumstances that can change. Tax rules can also change.

A State Pension is the amount that’s given to you by the Government and is based on your National Insurance contributions (NICs) record. You’re entitled to it when you reach your State Pension age and it will continue until you die.

Read more on the different types of pensions at the Money Advice Service

Find a lost pension

House moves. Career moves. Busy families. Life changes fast and it’s easy to lose track of your pension pots. Pension providers will send you a statement every year, but if you’ve moved house and not told them, it’s unlikely that you will have received them.

Finding a lost pension may be as easy as making sure your pension providers have your correct address. Otherwise, there are a few things you can do.

  • If you can remember the provider of your lost pension, call them and they’ll help you directly.
  • If you don’t remember the provider, but do know who you worked for when you paid into the pension, call the company.
  • If you don’t know the details of either the provider or the company associated with your lost pension, contact the Government's Pension Tracing Service.

Taking your money

Aged 55 or over? If you’ve understood the retirement basics, then explore your pension options.

Your pension options

Explore Retirement

Once you’ve got the basics, it’s time to take a look at some of the other stages of the retirement journey.

Retirement explained

Got a question?

If you need to ask us a question about pensions or retirement, then get in touch. There are lots of ways to contact us.

Contact us