Who Can Have a Personal Pension?
Anyone under 75 with UK earnings can contribute to a personal pension. You can have one alongside workplace pensions, and even non-earners can contribute up to £3,600 annually with tax relief.
What is a Personal Pension?
A personal pension is a retirement savings account that you control. You choose how much to pay in, where to invest your money, and how to take benefits when you retire.
As with all investments, the value and the income generated can fall as well as rise. This means you may not get back what you originally invested.
Tax treatment depends on individual circumstances and may change in future.
This information is for guidance only and does not constitute financial advice.
What is a personal pension
When you need more control over retirement saving
Your workplace pension gets you started, but the minimum contributions rarely build enough for a comfortable retirement. Personal pensions let you save additional money with generous tax relief, choose your own investments, and decide exactly when and how to access your money in retirement.
Key personal pension features:
- Tax relief on contributions turning every £80 you pay into £100 in your pension pot
- Investment choice from simple ready-made funds to individual company shares and property
- Flexible contribution patterns letting you pay more when you can afford it and less when money is tight
- Portable benefits that stay with you regardless of job changes or career breaks
- Retirement flexibility allowing access from age 55 with various income options
- Death benefits that usually pass to your family free from inheritance tax
The government adds at least 25% to everything you contribute through automatic tax relief. Higher rate taxpayers can claim even more back through their tax return, making personal pensions extremely tax-efficient.
Pick from thousands of investment options or stick with ready-made portfolios managed by professionals. You can change your mind as often as you like as your circumstances or confidence changes.
Unlike workplace schemes with fixed monthly deductions, personal pensions accept irregular contributions. Pay more when you get a bonus, less when money is tight, or take complete breaks if needed.
From age 55, you can take 25% as tax-free cash and use the rest to provide income. You choose between guaranteed annuity payments or flexible drawdown that keeps your money invested.
The value of your investments and any income from them can fall as well as rise. You may not get back the original amount you invested.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
Common personal pension questions
When Can You Access Your Money?
Personal pensions can usually be accessed from age 55 (rising to 57 in 2028). You can take benefits while continuing to work, and there’s no requirement to stop contributing when you start taking money out.
How Much Can You Contribute?
Annual allowances permit contributions up to £60,000 or 100% of your earnings, whichever is lower. Most people benefit from consistent monthly contributions rather than trying to maximize allowances.
What Happens If You Die?
Personal pension pots typically pass to your beneficiaries without inheritance tax. If you die before age 75, they can usually withdraw the money tax-free. After 75, they pay income tax at their marginal rate.
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