A Comprehensive Guide to the Types of Pensions Available in the UK
There are five main types of pensions in the UK and planning for retirement is crucial. Here is a quick guide to help you understand the different pensions available.
When it comes to planning for retirement, one of the most important decisions you’ll make is choosing the right pension scheme. With so many options available in the UK, it can be difficult to know where to start. That’s why Acuity is here to help. As pension professionals, we can guide you through the various types of pensions available and help you select the one that’s right for your needs.
Types of pension
Workplace Pensions: Workplace pensions are offered by employers to their employees, and both parties contribute towards the pension pot. There are two types of workplace pensions – Defined Benefit (DB) and Defined Contribution (DC) pensions.
Personal Pensions: Personal pensions are pensions that you set up yourself, and you make contributions to the pension pot. You can choose from different types of personal pensions, including Stakeholder Pensions, Self-Invested Personal Pensions (SIPPs), and Lifetime ISAs.
State Pensions: The State Pension is a government-provided pension scheme that you can claim when you reach the State Pension age. To qualify for the full State Pension, you need to have made National Insurance contributions for at least 35 years.
Final Salary Pensions: Final salary pensions, also known as Defined Benefit pensions, are workplace pensions that provide a guaranteed income in retirement. Your employer promises to pay you a percentage of your salary for the rest of your life.
Money Purchase Pensions: Money Purchase pensions, also known as Defined Contribution pensions, are workplace pensions where both the employer and the employee contribute to the pension pot. The value of the pension pot is based on the contributions made, the investment performance, and any fees.
In conclusion, saving for retirement is crucial, and choosing the right pension scheme is essential. With so many options available, it can be overwhelming to know where to start. That’s why it’s important to seek advice from pension professionals like Acuity. We can help you navigate the different types of pensions available and choose the plan that best suits your needs. Don’t delay – start planning for your retirement today.
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The information contained within this article is for information purposes only and does not constitute investment advice. It is not an offer to purchase or sell any particular asset and it does not contain all of the information which an investor may require in order to make an investment decision. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future.