A pension is a method of putting money aside for retirement. This is very often one of the biggest investments most people make. Because retirement can last for 20, 30 years or even longer it is important to understand what pensions you may have and how they build up a retirement income.
If you have an occupational pension, the benefits provided at retirement are based either on a) your years of service and earning or; b) how much is paid in and how the chosen investment performs.
Your retirement income is therefore particular to you and you should review your situation carefully to ensure that what you have in store is sufficient for retirement. This is especially important if your pension scheme relies on an investment, which can fall as well as rise.
The basic types of pensions that are or may be available to you are the following: