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Pensions

A pension is a tax-efficient way to save for your retirement, or for later life when you are no longer able to earn. At the point of retirement you will be able to access these savings and choose how to take out your money. This may be as an annuity, drawdown, or as cash if your pot is under a certain size. The 2014 Budget proposed substantial changes to the way you can take your money from defined contribution pensions in retirement. If you choose to buy an annuity, you will be paid an income for the rest of your life when you choose to retire.

Reasons to think about a pension

When you reach State Pension Age you will get a regular payment from the government; this is called the State Pension. If you want to have more money in your retirement than the State Pension provides, or you want to retire before the age at which you are entitled to receive the State Pension, it is a good idea to save into a pension to build your own retirement income.

The amount your pension will be worth at retirement depends on how much you save, so it is important to save while you are earning, and to contribute to your pension on a regular basis throughout your working life. 

The government also encourages you to save into a pension by giving you tax relief on your pension savings. For example, if you are a basic rate tax payer, or do not earn at all, for every £80 you save into your pension, the government will top this up by £20.

Next steps

In this section we present information about

Latest news

Cross-industry group on pension and investment transfers announces new Chair
Tom McPhail of Hargreaves Lansdown has been unanimously selected by the members of the cross-industry group on pension and investment tra...
18/01/2017
Pensions Dashboard project announces FinTech pioneers
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21/12/2016
Automatic enrolment review must lead to clear plans for all workers
The ABI responds to confirmation of the scope of the AE review
12/12/2016
Leading investment and pension bodies publish consultation on proposals to improve pension and investment transfers
Eight of the leading investment and pension trade associations have joined forces to investigate ways to improve the process of transferr...
05/12/2016
ABI comments on the Autumn Statement
In addition to earlier statements on Insurance Premium Tax rises, the Association of British Insurers (ABI) Director General, Huw Evans r...
23/11/2016
There should be no nasty surprises that could increase the cost of insurance for ‘just managing’ in next week’s Autumn Statement says the ABI
In advance of the next Wednesday’s Autumn Statement, the ABI is urging the Government to freeze the rate of Insurance Premium Tax (IPT)...
20/11/2016