Defined Contribution Pensions
What is a defined contribution pension?
Different types of defined contribution pensions
Adding money to your defined contribution pension
Most people believe that a defined contribution pension is not that different from a savings account with some great tax benefits.
From the moment you or your employer start adding money into your pension fund, your pension provider will start claiming tax relief in your name and add it to your pension pot. The pension provider also determines where your money will be invested. The final amount that will be accumulated into your pension fund depends on the following factors:
Paid Contributions
Investment Performance
Selection of Money Withdrawal
(i.e. regular payments, a lump sum or smaller sums)
You can also use our pension savings calculator to figure out your projected retirement income, based on how much money is in your pension pot and how much you’re contributing.
Withdrawing money from your defined contribution pension plan
Once you reach 55, you have several options in terms of what you can do with your defined contribution pension. One of them is to withdraw no more than 25% of your pot and pay zero taxes on that. The remaining money can stay invested, or you can use them to purchase an annuity which means a guaranteed income for the rest of your life or a specific period.
Need help with your defined contribution pension?
Do you have any questions regarding your defined contribution pension?
UK Pension Help can connect you to a qualified, regulated financial adviser who can answer any questions you might have around your defined contribution pension.
Book your free, no obligation consultation today so they can further assist you.