A workplace pension is a way of saving for your retirement that’s arranged by your employer.
Some workplace pensions are called ‘occupational, ‘works’, ‘company or ‘work-based’ pensions.
How they work
A percentage of your pay is put into the pension scheme automatically every payday.
In most cases, your employer also adds money into the pension scheme for you, and you get tax relief from the government.
When you can take your pension pot depends on your pension scheme’s rules – it’s usually 55 at the earliest.
What you’ll get and how you can take it depends on the type of scheme your employer offers you. You can usually take 25% of the money tax free.
With flexible access to your pension pot you could;
- Take your money in chunks
- Take 25% of it tax-free
- Leave the rest invested so it can potentially grow
- Pass on the money left when you die
- Run out of money if you don’t budget properly
- Reduce the maximum amount you can save into pensions