Private pension

A private pension is a form of retirement income that an individual pays into to form part of their pension provision separate from the state pension.

In essence a private pension is a tax free wrapper in which to save for your retirement. How you use this money is up to you. The most popular decision is to buy a type of annuity.

Because saving for a pension is tax-free, any investment into a private pension immediately gives the pension saver a big boost. If you pay £80 into a private pension you qualify for pension tax relief which means this £80 is boosted by 25 per cent to £100.

There are two main types of private pension. The first type is personal pensions and stakeholders. These usually offer a limited number of stocks and shares funds to invest in. The second main type is known as Self Invested Personal Pension Plans or SIPPS. These allow the investor to choose the type of vehicle they want to invest in and can be more risky but do come with the possibility of higher returns.

Related Articles

QE affecting pension funds, warns NAPF

Private pension fund deficits leap to £217bn

The combined deficit of the UK’s private final salary pension schemes has soared by £10.6 billion in the space of a month, new figures have revealed.

Private sector rents just £1 behind an all-time high

Private sector rents just £1 behind an all-time high

Average monthly rents across England and Wales are just one pound behind their all-time record high.

LV=  estimate that eight per cent of people don't have any pension arrangements.

Double the level of state pension needed for happy retirement

LV= puts the cost of a happy retirement at around £225,000, which means not everybody will be able to afford their ideal life once they stop work.

A new survey suggests private sector recruitment intentions are rising

BDO: UK recruitment plans for private sector at 19-month high

A new survey by accountants BDO shows that private sector hiring intentions have reached a 19-month high but the manufacturing sector remains a cause for concern.

Private pay deals have fallen, according to the IDS

Private sector pay deals decline

Research from the Incomes Data Services show that pay deals in the private sector have fallen from 2.5 per cent to just 0.5 per cent in the three months to July.

See more related articles

Newsletter sign up


In addition to the weekly newsletter, which areas of finance would you like to hear from us about:

Tick this box if you would like us to send you promotions from carefully selected third parties.

By signing-up you agree to the terms of use and privacy policy.

sign-up button

Get the latest information on: