A pension is a retirement plan that provides regular payments to a person after they retire.

Pensions are typically funded by contributions from both the employee and the employer. The employee’s contributions are usually deducted from their salary before tax, while the employer’s contributions are made after tax.

There are two main types of pensions: defined benefit pensions and defined contribution pensions.

a . Defined benefit pensions guarantee a certain level of income in retirement. The amount of income is usually calculated based on the employee’s salary and years of service.

b. Defined contribution pensions do not guarantee a certain level of income in retirement. The amount of income depends on the amount of money that the employee and employer contribute to the pension pot, as well as the investment performance of the pot.

In the UK, there are three main types of pensions;

a. State pension: The state pension is a basic pension that is paid to all eligible people aged 66 or over. The amount of the state pension depends on the number of qualifying years of National Insurance contributions.

b. Workplace pension: A workplace pension is a pension that is set up by an employer. Employees are usually automatically enrolled into a workplace pension, and their employer makes a contribution to the pot. Employees can also make voluntary contributions.

c. Personal pension: A personal pension is a pension that is set up by an individual. The individual makes contributions to the pot, and the money can be invested in a variety of different ways.

It is important to start saving for your pension as early as possible. The earlier you start saving, the more time your money has to grow.

Contact us today to start preparing for tomorrow!

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