How Pensions Work

Whether you have a Personal Pension or a Company Pension the way in which your pension works is fundamentally the same. It is a tax efficient way of saving today to provide an income for later in life when you retire. Each week or month, you pay money into your pension and the tax man also contributes. For a Company Pension, your employer will usually contribute also. This money is invested and over time the value grows. At retirement most pension will therefore provide you with a Tax Free Lump Sum and income for your retirement years.



For a Personal Pension, the money you pay into your pension is kept in your ‘Personal’ investment pot, to provide a pension for only you at retirement. For a Company Pension, all contributions from company employee are paid into the company pension scheme which pays a Lump Sum and pension on retirement according to the scheme rules.

The Retirement Planning process is a complex area. We, therefore strongly advise that you seek professional advice from a fully qualified and regulated Independent Financial Advisor. To arrange for a no obligations, initial free telephone consultation click here.