Confused about the different types of pensions you may have?
Here we'll explain the difference between defined benefit (DB) and defined contribution (DC) pensions.
Defined contribution (DC) pensions are investment backed schemes and enable you to set aside money to build up a pension pot. You'll normally be able to access your savings once you turn 55.
The size of your pension pot will depend on how much you pay in and how the investments perform. These plans can be set up by yourself as a personal pension or through an arrangement set up by your employer. The value of your pension pot will depend on:
DB pensions sometimes known as ‘final salary’ or ‘salary-related’ pensions, are only offered through an employer. The pension you receive is based on the pension scheme rules, but is mostly influenced by your salary and your length of service. The amount you'll get depends on:
Any references we make to taxation are based on our understanding of current legislation and HM Revenue & Customs practice, which can change.