With this type of scheme, you can build up a pension pot which you can draw a retirement income from.
The amount that builds up depends on:
- The level of charges you pay
- How well your investment performs, and
- How much you and your employer (if you are employed) pay into the scheme
Defined contribution pensions include:
- Executive pension plan
- Group personal pension
- Master trust pension (eg NEST, NOW pension, the People’s Pension)
- SIPP (Self Invested Personal Pension)
- SSAS (Small Self Administered Schemes)
- Stakeholder pension
Once you reach 55 (or younger if you’re in poor health) you can choose what to do with your pension pot. However, the longer you leave your pot to continue building up, the more money you will have to live on in retirement.
Back to Pensions