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What is a pension?

A pension is simply a form of saving for retirement. The idea is that during your working life you contribute towards pensions to ensure you can afford to retire at your chosen retirement age.

Getting this right requires long-term planning and commitment. It also requires regular reviews to ensure your pension and retirement plans are still on track.

The three main categories of pension are:

  • Personal pension
  • Workplace pension
  • Basic state pension

What is a personal pension?

A personal pension (often referred to as a personal pension plan, private pension, PP or PPP) is simply a form of saving for retirement which has generous tax benefits. The money you save in a personal pension builds up into a pot which is invested.

A personal pension is your own private pension which you can keep, regardless of your employment status.

There are many rules around personal pensions including rules around the pension annual allowance and the lifetime allowance. It is important to take independent financial advice to ensure your personal pension is tailored to your individual needs.

Why not contact us today for a no obligation chat and find out how our independent advice can help you plan for your future.

What is a workplace pension?

A workplace pension is a way of saving for retirement arranged through your employer. Workplace pensions are sometimes referred to as ‘company pensions’, ‘occupational pensions’ or ‘works pensions’.

Workplace pensions are explained in more detail on our dedicated workplace pension advice page.

How does the basic state pension work?

If you’re working, you are usually paying National Insurance contributions (NICs). This means you are building up a right to get a basic state pension when you reach state pension age. This is currently 65 for men and between 60 and 65 for women depending on when you were born.

The state pension age for women has been increasing in stages from 60 to 65 since April 2010 and this will continue until November 2018. The state pension age for men and women is increasing and will reach 66 by 2020, and is due to rise further to 67 by 2028 (though this needs to be approved by Parliament to become law). After that, the government has said further increases will be linked to the average length of time people are living.

It is now possible to get a state pension forecast from the government.

Why not contact one of our expert independent financial advisers today for a no obligation chat and discuss your retirement and pension plans.

Importance of financial advice

Your pension is hugely important to you and pensions need proper planning as well as utmost care and attention. It is important that you take independent financial advice before making any decisions that involve money and finance – especially those concerning pensions and retirement planning.

As whole of market independent financial advisers (IFAs) we are not tied to the products of any particular pension provider and are therefore able to find the best possible deal for you in the whole marketplace.

Whether you are new to pension planning or wish to consult on existing plans you already have in place, contact us and discover how our expert financial advice can help you plan for your future.

Our Scottish base in Glasgow is no barrier to giving whole of market independent financial advice across the UK.


A pension is a long term investment. The fund value can fluctuate and go down. All information is based on Farrell Financial Planning’s understanding of UK law & HMRC practice in the UK. Tax and legislation are subject to change.