About workplace pensions
A workplace pension is a way of saving for your retirement that’s arranged by your employer.
Some workplace pensions are called ‘occupational’, ‘works’, ‘company’ or ‘work-based’ pensions.
How they work
A percentage of your pay is put into the pension scheme automatically every payday.
In most cases, your employer and the Government also add money into the pension scheme for you.
The money is used to pay you an income for the rest of your life when you start getting the pension.
You can usually take some of your workplace pension as a tax-free lump sum when you retire.
If the amount of money you’ve saved is quite small, you may be able to take it all as a lump sum. 25% is tax free but you’ll have to pay Income Tax on the rest.
You can’t usually take the money out before you’re 55 at the earliest – unless you’re seriously ill.
Workplace pensions and the State Pension
Today the maximum basic State Pension you can get is £110.15 per week for a single person.
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