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Why you should pay attention to your pension

We’re currently facing a pension crisis. Put simply – we’re not saving enough for the future. This makes it more important than ever to be on top of your savings and pensions – regardless of how far away you think you are from retiring.

To help you get to grips with your pension we’ve gathered together some essential resources, including easy-to-use online tools and calculators plus a daily feed of the latest pension and retirement planning news. You can even have a go at our pension awareness quiz to test your knowledge.

QUIZ: HOW WELL DO YOU KNOW YOUR PENSION?

Test your knowledge and pick up some top tips along the way.



Question 1

How old do you need to be to start paying into a private pension?

You can start paying into a pension from 16 years old, but a parent or legal guardian will usually be responsible for the account until age 18.

Question 2

What is pension tax relief?

When you pay money into your pension, the government pays into it too. This comes in the form of tax relief.

If you’re a basic rate tax payer or non-earner they’ll add 20% on anything you pay in. And if you pay tax at a higher rate you can claim back up to a further 26% through your tax return. Tax rules change and benefits depend on individual circumstances.

Question 3

How much tax relief does a basic rate taxpayer receive on their personal pension contribution?

If you’re a basic rate taxpayer, the government will top up any personal contributions with basic-rate tax relief which is currently 20%.

Question 4

What’s the maximum amount that can usually be paid into pensions each tax year (including tax relief) without incurring a tax charge?

For most people, the annual allowance is £40,000. Exceeding this limit may result in a tax charge.

Question 5

How much can you pay into a pension if you're a non-earner, and still get tax relief?

If you’re a non-earner you can currently put in up to £3,600 each tax year into pensions. You pay in up to £2,880 and the government will add up to £720.

Question 6

What’s the earliest age you can usually start withdrawing from your private or workplace pension?

You can normally start accessing your pension from age 55, but this is set to rise to 57 from 2028.

Question 7

How much of a private pension can someone usually receive tax-free?

You can normally take up to 25% of your pension as a tax-free lump sum. This can be accessed in one go or gradually.

Question 8

What is the earliest age that you can start claiming your State Pension?

State pension age is currently 66 and is set to rise again to 68 by 2046 (although it’s been proposed to reach this age a lot sooner).

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Good try!

Thanks for taking part in our pension awareness quiz! We hope you’ve learnt something new.

Good try!

Thanks for taking part in our pension awareness quiz! We hope you’ve learnt something new.

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Thanks for taking part in our pension awareness quiz! We hope you’ve learnt something new.

Important information: What you do with your pension is an important decision. All investments can rise and fall in value. It’s possible to get back less than you pay in. You’ll usually need to be at least 55 (rising to 57 from 2028) before you can access the money in your pension. Pension and tax rules can change and any benefits will depend on your circumstances. Nothing on this page or our website is personal advice. If you’re not sure what’s best for your situation, you should seek financial advice.

Consolidate your pensions

Bringing your pensions together could give you a clearer view of how much you’ve saved, and what you’re on track to get at retirement. But transferring a pension is a big decision and is one that shouldn’t be taken lightly.

To help, watch our pre-recorded webinar which covers:

  • What to watch out for before transferring a pension
  • Reasons to transfer
  • Common misconceptions about transferring
  • A transfer checklist

More about transferring

If you’re thinking about transferring, please check you won't lose valuable guarantees or benefits or have to pay excessive exit fees.

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