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Planning for retirement

Saving for retirement is something that most of us tend to put off for as long as we can. But the reality is that the sooner you start paying into a pension the higher your income in retirement is likely to be. If you're working you're usually building up the right to a basic State Pension – and possibly an additional State pension – but these may not be enough to give you the standard of living you want. You can obtain a pension forecast by contacting the Department of work and Pensions.

This section will help you to understand the benefits of using a pension to save for your retirement, what type of pensions are available, how they work and how to start saving for your retirement.

What is a pension?

Basically pensions are long-term investments with special tax rules – for example, you get tax relief on your contributions.

You can't access the money in your pension until you reach age 55. Some occupational pension schemes have additional rules about when you can take your benefits – check with your scheme provider. At retirement you generally have options to receive income and a lump sum.

Types of pensions

There are three main types of non-State pension. They are:
  • occupational salary-related schemes - offered by some employers;
  • occupational defined contribution schemes (also called money purchase pensions) - offered by some employers; and
  • stakeholder pensions and personal pensions - offered by some employers, or you can start one yourself. You may also be offered a group personal pension at work. These are also money purchase pensions. Many employers are now only offering money purchase plans due to the high cost of maintaining earnings related pension schemes.

Pensions at work

If you work for a business with fewer than five employees, your employer does not have to offer you access to a pension scheme. You should still check what’s available, as some small employers may offer a scheme anyway. The government is planning changes that will mean all employers will have to offer and contribute to a pension in future. Employers who haven't offered an occupational pension in the past may set up their own scheme, or may pay pensions into a new central scheme that is being set up.

What are the benefits?

Although you don’t have to join any pension scheme offered through your emplyment, it’s usually a good idea to join an occupational pension scheme if it’s available because:

  • your employer normally contributes; and
  • often you also get other benefits, such as:
    • life insurance which pays a lump sum and/or pension to your dependants if you die while still in service;
    • a pension if you have to retire early because of ill-health; and
    • pensions for your spouse and other dependants when you die.

Not all pensions offered by employers are occupational pensions. Your employer may offer a stakeholder pension or a personal pension through a group personal pension arrangement. These pensions are not called occupational pensions even though the employer may contribute.

What you should do


  1. Find out whether your employer offers a pension scheme, what type it is and when you can join it.
  2. Don't delay starting or joining a pension scheme - you could end up with a much smaller pension.

We are unable to provide you with specific advice on pensions, however we can introduce you to a specialist. Please complete the contact us form on the contact page and they will get back to you to discuss your requirements.