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 workplace pensions 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.
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.
If the amount of money in your pension pot is quite small, you may be able to take it all as a lump sum - 25% would be tax free but you’d pay Income Tax on the rest. See our guide to the recent changes to when and how you can access your pension
You should get financial advice as to how much you will get from your pension when you retire. This might sound boring and expensive, some advisors charge upto £700 to perform a detialed review of your pension, but no one should sleepwalk into retirement. The earlier you know what you are getting the better you can plan. Money Advice Online have arranged for our users to get a FREE pension review from an FCA approved advisor.
Click here now to arrange your FREE Pension Review.>
Workplace pensions and the State Pension
You can get money from a workplace or other pension on top of the State Pension.
Today the maximum basic State Pension you can get is £115.95 per week for a single person.
What is automatic enrollment
A new law means that every employer must automatically enrol workers into a workplace pension scheme if they:
- are aged between 22 and State Pension age
- earn more than £10,000 a year
- work in the UK
- This is called ‘automatic enrolment’.
You may not see any changes if you’re already in a workplace pension scheme. But if your employer doesn’t already contribute to your pension, they will have to start when they ‘automatically enrol’ every worker.
Our pension specialists can quickly advise you best options available and will perform a review free of charge. Simply call the team FREE on 0800 088 2208. Alternatively use the pension review test and find your best option.