There are different types of pension, all with different features and benefits. Understanding what pension you’ve got and how it works is the first step to making sure your financial future is as secure as possible.
Personal pensions
Personal pensions come in all shapes and sizes. The key things they have in common are that they will involve a personal contract between you and your pension provider, and their aim will be to provide you with an income at retirement. Plus, the value of your pension will depend on: how much you have contributed; how long you have saved for; how well your investments have done, and the impact of scheme charges.
Final salary pension
A final salary pension, which some employers provide as an alternative to a personal pension, guarantees an income for your retirement. The amount you receive depends on how long you have worked for the company and your salary on leaving.
Types of final salary pensions can vary based on whether you work for the public or private sector.
They come with very lucrative benefits and guarantees.