Defined Contribution Pensions

Defined Contribution (DC) or ‘Money Purchase’ pensions are the most common type of pension fund. They usually come in the form of a private pension or stakeholder pension that are either arranged by you directly or through your employer within your workplace pension.

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Types of defined
contribution pensions:

  • Executive Pension Plan
  • Group Personal Pension
  • Master Trust Pension (e.g. The People’s Pension, NEST Pension and NOW Pension are popular with auto-enrolment schemes)
  • Self-Invested Personal Pension (commonly known as a SIPP)
  • Stakeholder Pension

How do defined contribution
pensions grow?

A Defined Contribution pension simply put, is a long-term savings account and its growth is directly linked to the amount of funds (contributions) saved, the investment performance of the fund, minus the fees taken by the pension provider. The value of your pension pot can go up and down depending on these investments and fees taken, so it is worth keeping a close eye on how your DC pension fund is performing.

Can you only have one pension?

There is no limit to the number of pensions a person can hold, and many people have multiple defined contribution pensions that they have either started directly or through old workplace schemes. When you come to retire, the size of your pension fund and retirement income you could receive will depend on many factors including:

  • How long have you saved into your pensions
  • How much you and your employer have paid (if a workplace pension)
  • How much money you may have taken out previously in a lump sum
  • How well your pension investments have performed
  • What charges have been taken out by your pension provider

How can you access your defined contribution pensions?

There are numerous ways in which you can use your private pension savings, but not all pensions offer the same access:

  1. Purchase an annuity insurance policy (taxable retirement income) that will deliver a set amount of funds regularly
  2. Take 25% Tax-Free Lump Sum and leave the rest invested until required
  3. Take 25% Tax-Free Lump Sum and purchase an annuity insurance policy with the rest of the funds
  4. Take all of your funds in one go, although you may be penalised with higher taxes within that financial year
  5. Take lump sums as, and when you need them, the first 25% of your withdrawals will be tax-free

What’s best for you and your pension

It is always advisable to get professional financial help when investing for your future and understanding what the best option for you is when you retire.

At Pension Works, we offer a full, independent retirement planning service, to help you get the most from your pension savings. We will assess your current defined contribution pensions for free and provide any recommendations we can to help you reach your retirement goals.

To start your free defined contribution pension assessment, please call 0808 164 2664, or get in touch.

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Client Criteria

We believe that financial advice should be available to the masses.

With this in mind, we apply the following case acceptance criteria:

  • The value of the pension(s) must exceed £15,000.
  • You must not be on means tested benefits (excluding Child Benefit).
  • You must be a current UK resident and UK taxpayer (or non-taxpayer) and the pension scheme must be UK-based.
  • Must not be government pension e.g. NHS, Armed Forces, Teacher, Fire Service, Police.

Our Process


Initial Engagment

At the start of the process we take the time to explain everything to you, as well as issuing our Terms of Business, which includes an overview of our charges. We also ask you to sign and return a Letter of Authority for your pensions.


Information Gathering

When we receive your signed Letter of Authority, we will contact your pension providers to gather any relevant scheme details.


Fact Find Meeting

Your dedicated Financial Adviser will call you and ask a number of questions in relation to your personal circumstances, attitude to investment risk, your retirement aims and objectives. This call should not take longer than 45 minutes to 1 hour.


Advice Stage

After thorough analysis of all available options in the marketplace, a free advice report will then be produced determining the most appropriate outcome for your pension or pensions. The outcome of our advice will either be to transfer your pension(s) if we feel there is more suitable plan or to retain the pension if we believe it meets your requirements.



Should a transfer be deemed suitable and you wish to proceed, we will issue you the required documentation, along with a fee agreement, in order for us to facilitate this transfer on your behalf.

Our Fees

If you choose to proceed with our transfer advice, our fee will be paid out of your pension pot. If the recommendation is to maintain or you do not wish to go ahead, our advice is completely free.

Fee Calculator

  • Please enter a number greater than or equal to 30000.
    Please enter a number greater than or equal to £30,000.

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We provide simple, clear and honest advice and we’re here to help. If you've got a question or want to know more about any of our services, simply click the button below and complete our contact form.

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