What different types of pension are there?
There are several different types of pensions which can suit whatever your wants and needs.
Final salary pensions, also known as defined benefit schemes, are largely funded by employers, though staff may also pay into them.
These pension schemes are often used within public service professions.
Money purchase pensions, also known as defined contribution schemes, are most often used as workplace and personal pensions.
The money you put into your pension plan is invested and what you have at retirement depends on how those investments have performed.
You can also save in the following pensions: workplace, trust-based, group personal, stakeholder and self-invested personal pensions (Sipps).
A workplace pension is where you and/or your employer make regular monthly contributions.
Trust-based pensions are those where a board of trustees manages investments on your behalf.
Group personal pensions are a type of pension between you and a third party insurance provider.
Stakeholder pensions are similar to workplace pensions but have low and flexible minimum contributions, capped charges and a default investment choice.
Sipps essentially give the power back to the pension holder and allow them to choose their investment for themselves.