Reference

Pension Glossary

Plain-English definitions of every pension term you need to know.

16 terms

A

The maximum amount you can contribute to pensions each tax year while still receiving tax relief.

A pension scheme that pays a guaranteed income in retirement based on your salary and years of service.

A pension scheme where your retirement income depends on how much you and your employer contribute, and how your investments perform.

A self-invested personal pension opened for a child, allowing family members to save for their retirement from an early age.

The maximum amount of tax-free cash you can take from your pensions over your lifetime.

A product that converts your pension pot into a guaranteed regular income for life.

The process of combining multiple pension pots into a single scheme to simplify management.

A way of taking money from your pension pot while leaving the rest invested.

The practice of taking a tax-free lump sum from your pension and reinvesting it back into a pension to gain further tax relief.

An arrangement where you give up part of your salary in exchange for a higher employer pension contribution.

A personal pension that gives you control over how your retirement savings are invested.

A regular payment from the UK government in retirement, based on your National Insurance record.

A government top-up on your pension contributions that effectively refunds the income tax you paid on that money.

A government commitment to increase the State Pension each year by the highest of inflation, average earnings growth, or 2.5%.

A government-backed digital service that lets you see all your pensions in one place.

A way to withdraw cash directly from your pension pot without moving into drawdown first.