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How a pension works

Here you'll find a summary of how a pension works and some of the benefits it can offer you.

How a pension works diagram

Making contributions

Each time you save into your plan, so will your employer and the taxman. This will help to boost your retirement savings. Remember that contributions from the taxman depend on individual circumstances and may change in the future.

Share our success

We'll aim to give your retirement savings an extra boost by adding a share of our profits to your plan each year. We've called this your ProfitShare.

Investing your retirement savings

Your retirement savings are locked away and invested in the plan default investment choice to help them grow.

You can stick with this option or choose your own investments. Remember that investment returns are never guaranteed so you could get back less than you put in. Additional charges may apply if you choose your own investments. 

Our investment options are reviewed by experts. This helps make sure they meet their objectives. This ongoing governance comes at no extra cost to you.

Taking your retirement benefits

You can normally start taking your retirement benefits any time after age 55.

Take some or all of your plan as a cash lump sum - 25% of each lump sum will be tax-free. The rest will be subject to tax.

Alternatively, you can take up to 25% of your plan as a tax-free cash sum. The rest can be used to provide you with a guaranteed income for life by buying an annuity.

You also have the option to move to another plan that gives you the flexibility to take the regular income you want, when you need it.