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Types of pension

A pension scheme is a type of savings plan that can help you save money for later on in life. It's one of the best ways to grow your money steadily over time.

All pension schemes receive tax relief on personal contributions, but a workplace pension scheme, such as NEST, allows you to benefit even further because employers also contribute. These regular contributions are then invested so that they can have the best chance of growing across your working life to help you in retirement.

Read more on why it’s worth saving into a workplace pension.

The three types of pension

The language around pensions can sometimes be a bit confusing, so to make sure you know the options available to you, we’ll explain the three main types of pensions you’ll come across in the UK in the tabs below.

Accessing your pension

As a general rule, you can start accessing the money in any pension scheme from the age of 55 – however, it’s important to remember that the earlier you draw your pension, the lower the benefits will be, and you may wish to benefit from saving into your pension for longer. To do this for your NEST pension, simply defer by changing your retirement age. You can change this at any time by logging in to your NEST account.

It’s also worth remembering that under the Pensions Act of 2008, every employer in the UK is legally required to put certain staff into a pension scheme and make contributions into it – a process called auto-enrolment.

Check out the multiple benefits of a workplace pension

Extra money from your employer on top of your contributions, tax relief and hassle-free control of your future are just some of the reasons why a workplace pension could be right for you.