What is a
Private Pensions are typically called Defined Contribution and are individual contracts between you and the pension provider. They can either be set-up by you or by your employer through a workplace pension scheme.
To give financial security in retirement, people regularly pay into a pension (called a pension contribution) for it to grow and in the case of a workplace pension, the employer could also contribute. For further growth, the pension provider will invest those funds often in stocks, shares or alternative investments depending on the risk profile of the pension fund.
Can you only have
one private 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