Pension provision

Fact sheet: Pension provision

Pensions are a great way of saving for retirement. Do you understand the options available to you?


In its simplest form, a pension is an income that you receive when you retire, from the pension pot that you saved into during your working life. To encourage us to save enough for our retirement, the government provides tax relief on contributions and incentives on the way the eventual fund is taxed.

Basic State Pension

The value of the Basic State Pension is fairly low, and not everybody qualifies for a full entitlement. You have to have made a minimum level of National Insurance contributions to receive benefits.

You can obtain a State Pension forecast to see what you are entitled to by submitting a BR19 form to the Department for Work & Pensions. Alternatively, it can be checked online at If it looks like you are not going to get a full State Pension, you can top up your National Insurance contributions to make up for lost time.

However, most people cannot rely solely on the Basic State Pension, as it is unlikely to provide all the retirement income you will need. The full State Pension entitlement is currently £203.85 per week (£10,600.20 per year).

Occupational pensions

There are two main types of occupational pension scheme: defined benefit (sometimes known as final salary) and defined contribution (also known as money purchase).

Defined benefit schemes

Defined benefit company pensions pay you a retirement income based on your final salary (or an average of your salary for the last few years of your employment) and period of scheme membership. Typically, the benefits will involve a lump sum and an income for life. There are often a number of useful add-ons, such as a pension for your spouse, if you die before them.

Defined contribution schemes

The effect of a defined contribution occupational scheme is similar to having a personal pension into which your employer makes contributions.

Your benefits depend on what is put into the pension fund and how the investments perform. At retirement you can currently receive up to 25% of the fund as a tax-free lump sum, while the remainder may be used to provide a taxable income.

Unlike defined benefit schemes you have much more responsibility for your pension. You have to:

  • decide how much to contribute;
  • decide which investment strategy to access; and
  • monitor the progress of the underlying investments and consider increasing your contributions, if necessary.


Read our fact sheet for more information.

How can we help you?

If you would like to review your pension arrangements, or look at your wider retirement planning options,  we can help. 

If you would like assistance with your retirement planning, or if you wish to arrange an initial no cost, no obligation, consultation, then please fill out the contact form below. Alternatively, you can call 01603 706 820 or email

Important information

This is solely for informational purposes and nothing in it is intended to constitute advice or a recommendation. You should not make any investment decisions based on this content.

This has been prepared based on our current understanding of UK Law, Taxation and HMRC practice, all of which could be subject to change in future. 

The value of investments can fall as well as rise and it may not always be possible to receive back the sum initially invested. Past performance is not necessarily a guide to future investment returns. Pension eligibility depends upon individual circumstances. Pension benefits cannot usually be taken until age 55.

While considerable care has been taken to ensure this information is accurate and up-to-date, no warranty is given as to its accuracy. This article constitutes a financial promotion.

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