There are many different pension schemes available to support you during retirement. Put simply, a pension scheme is a way of saving for later life, but with tax relief on your contributions.

Most people are entitled to a state pension when they reach state pension age, but you may also have a personal or a workplace pension. In this section, you can find free and impartial advice on pensions, annuities and retirement planning.

State Pension

State Pension is a regular payment from the government based on your National Insurance (NI) contributions.

You can receive it when you reach State Pension age. From December 2018, the State Pension age for both men and women started to gradually rise, reaching 66 by October 2020.

You can check your pension age by calling our Advice and Advocacy Service on freephone 0808 808 7575 or using the calculator at www.gov.uk/calculate-state-pension

How do I claim it?

You won’t receive your pension automatically – you need to claim it. You should receive a letter from the Northern Ireland Pension Centre around four months before you reach State Pension age telling you what to do next. If you still haven’t received it with three months to go, contact the Northern Ireland Pension Centre.

You don’t have to claim your State Pension straight away. You can postpone claiming it – known as ‘deferring’ – and possibly get a higher pension when you do. There are some benefits that might be affected if you defer so call our Advice and Advocacy Service on freephone 0808 808 7575 to find out the best option for you.

What am I claiming?

On 6 April 2016, the State Pension changed. There are now two systems:

• The new State Pension will apply to you if you reached (or will reach) State Pension age on or after 6 April 2016.
• The basic State Pension will apply to you if you reached State Pension age before 6 April 2016

The new State Pension

Under the new system the full weekly amount will be given to people with at least 35 years National Insurance (NI) contributions or credits. It will be worth £175.20 per week, but you could get more or less than this depending on how many years of NI contributions you have.Exactly how much will I get?

You must have been credited with NI contributions throughout your working years. The amount you will receive depends on the number of years of contributions. Under the new system you need at least 10 years contributions to qualify.

The basic State Pension

The full basic State Pension under the old rules is £134.25 a week for people with at least 30 years of NI contributions.Exactly how much will I get?

You’ll get the full amount (£134.25 per week) if you’ve made NI contributions for 30 years or more. If you haven’t, you’ll get 1/30th of the full amount for each year of contributions. You can also pay voluntary contributions to cover any gaps while you weren’t working or getting tax credits. Under the old rules, you may be able to ‘top up’ your State Pension based on your spouse or civil partner’s contributions if they’re of pension age.

Workplace pensions

The State Pension can help to cover your basic needs in retirement, but some extra money from a pension scheme can make retirement more enjoyable. Most employers must offer workplace pensions and should automatically enrol you if you’re eligible.

What is a workplace pension?

Workplace pension schemes are run by employers. Your pension pot is based on contributions taken directly from your wages, as well as your employer’s contributions. There are two main types of workplace pension schemes:

• Occupational pensions
• Group personal pensions

Occupational pensions

Employers set up occupational pension schemes to provide pensions for their employees. There are two types of occupational pensions.

Money purchase or defined contribution schemes: your pension is put into investments (e.g. shares) by the pension provider so the amount you have in retirement also depends on how investments perform.

Final salary or defined benefit schemes: your pension is based on your salary and how long you’ve worked for your employer. The pension provider pays you a certain amount every year when you retire. Your pension pot doesn’t depend on investments. The number of employers offering these schemes has been in decline in recent years, although they are still common across much of the public sector.

Group personal pensions

Your employer chooses a pension provider to run a group personal pension scheme, but your pension is an individual contract between you and the provider. As with an occupational pension your employer does not have to make contributions.

Your pension pot grows using your contributions, any of your employer’s contributions, tax relief and investment returns. Group personal pensions are a type of defined contribution pension so the amount you have in retirement also depends on how investments perform.

If you’re unsure what type of scheme you’re in, contact your employer or pension scheme provider to find out.

Am I eligible for a workplace pension?

All employers must offer a pension scheme that’s subject to minimum regulatory and governance requirements. This is known as automatic enrolment. They must also contribute a set proportion of your wage to your pension pot.

You’ll be automatically enrolled into a scheme if:

• you’re aged over 22
• you’re under State Pension age
• you earn more than £10,000 a year
• you’re not already in a workplace pension scheme
• you work in the UK.

You can opt out of the pension at any time, usually by completing a form and returning it to your employer or pension provider. If you opt out, your employer will be required to re-enrol you every three years, at which time you’ll need to opt out again if you don’t wish to save. If you can afford to, it’s a good idea to join the scheme.

The Government has created automatic enrolment to encourage people to save additional money for retirement, as the State Pension alone is a low amount to live on for most people.

How much do I need to contribute to my pension pot?

The minimum contribution is currently 2%. Of this total:

• 0.8% comes out of your take-home pay
• the rest is made up of your employer's contributions and tax relief.

After April 2018, the minimum rates will change and both employee and employer contributions will go up. You can also make additional payments if you want to.

What happens to my pension pot if I change jobs?

If you change jobs, you can:

• leave the pension in your old employer’s scheme and access it once you reach the scheme’s pension age.
• transfer money to your new workplace pension scheme. This isn’t possible for all schemes so talk to your pension provider or an independent financial adviser about your options.

If you’ve lost track of old pensions or you’re not sure if you were enrolled in an old workplace pension scheme, there are different ways you can find them. See our section on Tracing lost pensions.

When can I withdraw my pension?

In April 2015, the Government introduced new rules which allow everyone full access to their pension pot from age 55, as well as increased choice over what to do with the money.

When accessing your pot, it is worth thinking about how you will fund the future of your retirement, and avoid making any hasty decisions that may leave you worse off in the long-term.

The Government provides a free guidance service, Pension Wise, which can help explain your options in more detail. You can make an appointment over the phone or at a face-to-face session.

Can I leave my pension pot to my spouse or family?

You can usually choose someone, such as your spouse, family or friends, who will get your pension pot if you die before reaching your scheme’s pension age. You usually need to do this in writing, and can change your nomination. Check the rules with your pension scheme.

Will I still get the State Pension if I have a workplace pension scheme?

Saving into a workplace pension does not affect your entitlement to the State Pension. How much State Pension you qualify for is based on your National Insurance contributions record.

For more information on pensions, click here.