Invest
Pensions
Understand workplace pensions, personal pensions and SIPPs — including tax relief, contribution limits, pension transfers and retirement income options under current UK rules. Capital is at risk where pensions are invested.
Choosing a pension route
Which pension area should you explore?
Start with the main type that matches your situation.
- Workplace pensionBest starting point if: You are employed and your employer contributes.
- Personal pensionBest starting point if: You want a simpler pension outside your workplace scheme.
- SIPPBest starting point if: You want wider DIY investment choice and control.
This is general guidance, not personalised financial advice. Use the topic cards above for drawdown, transfers and tax relief.
Pension types
Compare common pension types
Hub-level differences only — no type is universally better.
| Feature | Workplace Pension | Personal Pension | SIPP |
|---|---|---|---|
| Employer contributions | Often available — a key benefit | Usually not | Uncommon; workplace schemes are the usual route |
| Investment choice | Usually limited | Moderate | Usually broad |
| DIY control | Low | Low to medium | High |
| Typical fees | Often scheme-negotiated; check your statement | Varies by provider | Platform, dealing and fund charges can stack |
| Who it may suit | Employees with employer contributions | People wanting simpler personal retirement saving | Investors wanting wider DIY choice and control |
Pension rules
Current rules at a glance
Key 2026/27 figures from official guidance — checked regularly and kept in one place.
Current rules
Rules last checked: 16 September 2026
Current tax year
2026/27
Annual allowance
£60,000
MPAA
£10,000
Minimum access age
55
Contributions across registered pensions usually count towards the same annual allowance. Higher earners may have a reduced (tapered) annual allowance under current rules — check official guidance for thresholds.
Current rule
Minimum pension access age
55
Normal minimum age under current legislation for many private pensions.
Planned / future change
Scheduled access-age rise
Scheduled to rise to 57 from 6 April 2028 for many people, subject to applicable rules. Not yet in force for everyone — do not treat as current law.
Official guidance: GOV.UK — pension schemes rates
How it works
How pensions work
From contribution to later-life access.
Step 1
You contribute
You pay money into a pension.
Step 2
Tax relief / employer contributions
Tax relief and employer contributions may increase the amount saved.
Step 3
Money is invested
Your pension is usually invested in funds or other assets.
Step 4
Value can rise or fall
Investment returns are not guaranteed.
Step 5
You access it later
Withdrawals become available under current pension rules.
Pensions are long-term products and access is normally restricted until later life.
Tax relief
How pension tax relief works
High-level rules only — not personalised tax advice.
Eligible contributions can receive tax relief within limits. Treatment depends on your earnings and tax position.
Higher-rate and additional-rate taxpayers may need to claim further relief. Tax rules can change.
- 20% basic-rate relief is typical through relief at source where applicable
- Annual allowance and MPAA figures are shown in Current rules at a glance (2026/27)
- Higher earners may have a reduced (tapered) annual allowance under current rules — check official guidance for thresholds.
- Unused annual allowance from the previous three tax years may be available in some cases, subject to conditions.
- Low or no UK earnings: up to £3,600 gross may still attract tax relief under current rules
This is general information, not personalised tax advice. Official guidance: GOV.UK — annual allowance
Workplace pensions
Why your workplace pension matters
Employer contributions are often the main advantage.
Auto-enrolment
Eligible employees may be automatically enrolled under current UK rules.
Employee contributions
You usually contribute through payroll.
Employer contributions
Employer contributions are often the main reason workplace pensions are valuable — check what you would lose before leaving or transferring.
Tax relief
Eligible contributions may benefit from pension tax relief.
Changing jobs
Old workplace pensions normally remain yours. A new employer usually enrols you in a new scheme.
Before opening or transferring into another pension, check whether you would lose employer contributions or valuable scheme benefits.
Official guidance: GOV.UK — workplace pensions
Pension transfers
What to check before transferring a pension
A transfer is not automatically beneficial.
A pension transfer is not automatically beneficial. Some pensions contain valuable guarantees or safeguarded benefits that can be lost on transfer.
Defined benefit (final salary or career average) transfers are complex and can involve losing valuable guaranteed income. Do not casually transfer a defined benefit pension. Seek regulated advice where required.
- Exit fees
- Guaranteed benefits
- Safeguarded benefits
- Protected pension age
- Employer contribution arrangements
- Investment choice
- New provider fees
- Drawdown options
- Cash vs in-specie transfer
- Whether regulated advice may be appropriate
For independent guidance, see MoneyHelper — pensions.
Retirement income
What can you do with a pension at retirement?
Options depend on your scheme, age and circumstances.
Pension drawdown
Keep money invested and take flexible withdrawals.
Annuity
Exchange pension savings for a guaranteed income under the annuity contract.
Lump sums
Take eligible pension money as one-off withdrawals subject to current rules.
Mix of options
Some people use more than one retirement-income method.
Tax, investment risk and sustainability differ between options. Flexibly accessing income may trigger the Money Purchase Annual Allowance — see Current rules at a glance.
Many people can take a tax-free lump sum from their pension subject to allowances and scheme rules. Limits and entitlement can change.
Compare options
Pension or ISA?
Neither is universally better — many people use both.
| Feature | Pension | ISA |
|---|---|---|
| Tax relief | May apply on eligible contributions | No pension tax relief |
| Access | Normally restricted until age 55 under current rules | Usually more flexible (product rules apply) |
| Employer contributions | May be available via a workplace scheme | No employer pension contribution |
| Annual limits | Pension annual allowance applies (2026/27) | ISA allowance rules apply for the tax year |
| Investment risk | Depends on holdings — capital can fall | Cash ISA: no market risk. Investing ISAs: capital at risk |
| Main purpose | Designed primarily for retirement | Flexible saving or investing for many goals |
Neither is universally better. Many people use both for different goals.
Compare ISAsImportant information
Pension risks and important considerations
- Investments can fall in value — you may get back less than invested
- Inflation and charges can reduce future value
- Drawdown withdrawals can reduce how long savings last
- Transfers can mean valuable benefits are lost
- Tax and pension rules can change
- Access is normally restricted until later life
- FSCS may cover eligible firm-failure claims — not normal market losses
Personal pensions & SIPPs
Personal pension vs SIPP
A personal pension is arranged by you, outside a workplace scheme. A SIPP is a type of personal pension with typically wider investment choice and greater DIY control.
Personal pension
- Simpler investment range
- Often ready-made or managed
- Less DIY involvement
SIPP
- Wider investment choice
- More DIY control
- Fees may be more complex
Neither is universally better. Provider fees and features are compared on the SIPPs page — not here.
Compare SIPPsFAQs
Common questions about pensions
Extra points not covered above — not personalised tax or investment advice.
Our editorial approach
How we review pension information
- UK pension rules checked against official government guidance
- Future rule changes clearly separated from current rules
- Content reviewed regularly
- Commercial relationships do not determine factual guidance
Last reviewed: 16 September 2026
Pension rules last checked: 16 September 2026
Regulatory information last checked: 16 September 2026
Sources and further information
Reference links only — these organisations do not endorse WiT Money.
- GOV.UK — pensions guidance(opens in a new tab)
- GOV.UK — pension schemes rates(opens in a new tab)
- HMRC / GOV.UK — tax on private pensions(opens in a new tab)
- GOV.UK — annual allowance(opens in a new tab)
- GOV.UK — workplace pensions(opens in a new tab)
- MoneyHelper(opens in a new tab)
- Financial Conduct Authority(opens in a new tab)
- FCA Register(opens in a new tab)
- Financial Services Compensation Scheme(opens in a new tab)
Found an outdated pension rule, allowance or provider detail? Email contact@witfinancegroup.com. We review reported inaccuracies and update verified information promptly.
Next steps
Continue exploring
Related comparisons — SIPP providers live on the dedicated SIPPs page.