Workplace Pensions

About workplace pensions

A workplace pension is a way of saving for your retirement that's arranged by your employer.

Some workplace pensions are called 'occupational', 'works', 'company' or 'work-based' pensions.

You and / or your employer may already have chosen to pay more than the minimum contributions. If your payments are greater than the increased minimum levels, you will not need to pay any more.

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How your workplace pension works

A percentage of your pay is put into the pension scheme automatically every payday.

In most cases, your employer and the government also add money into the pension scheme for you.

The money is intended to supplement your retirement income when you start getting the pension.

You can usually take some of your workplace pension as a tax-free lump sum when you retire.

If the amount of money you have saved is quite small, you may be able to take it all as a lump sum. 25% is tax free but you'll have to pay Income Tax on the rest.

You cannot usually take the money out before you're 55 at the earliest - unless you are seriously ill.

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A pension is a long term investment, the fund may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax leglisation.