A pension is a long-term savings plan designed to help you save for the future. Your savings are invested by companies like TPT to offer your money the best chance of growing.
Putting money away now, while you’re working, will provide you with an income when the time comes to wind down from work or retire from work completely.
There are three main types of pension:
The State Pension is an amount of money paid by the government to people who qualify when they reach State Pension age. The amount of State Pension you’re eligible to receive is determined by the number of "qualified years" of national insurance you have paid. This includes both payments paid while working, and contributions credited to you if you are unable to work.
Currently, you can start claiming State Pension from age 66 (this changes to age 67 from 6 April 2028) if you have at least 10 qualifying years on your National Insurance record. You can access your TPT DC pension from age 55.
To find out whether you are eligible for the state pension, click here.
For many people, the income they might get from the state pension isn’t enough to allow them to live the life they want when they retire, and some people want to retire earlier than State Pension age. This is where personal and workplace pensions come in.
A workplace pension is a savings scheme offered by your employer as part of your employment benefits package. The law requires employers to enrol their employees into a workplace pension if they meet certain criteria.
You will be automatically enrolled in a workplace pension if:
To find out more about automatic enrolment, click here.
The government sets minimum amounts that both you and your employer must pay into your workplace pension. Currently, the total minimum contribution rate is 8% of qualifying earnings. Your employer must pay at least 3% of this and you must pay the remaining 5%.
Some employers offer to pay more than the minimum 3% into your pension if you choose to increase your contributions too. This is known as ‘contribution matching’.
If your employer offers contribution matching, you may want to consider paying more into your pension to take advantage of this.
Your pension contributions are taken directly from your salary before any tax deductions, which means you benefit from tax relief.
So if you’re a basic rate tax-payer (earning £12,571 - £50,720), every £10 you pay into your pension only costs you £8.
A private pension is similar to a defined contribution workplace pension in that the amount of money you receive in retirement is determined by how much you put in and the performance of your assets.
Contributions to a private pension are generally treated as post-tax pay, therefore your pension provider must claim tax relief of 20% from HMRC.
Private pensions have the advantage of not changing providers if you change jobs, and you can transfer former employment pensions into your private pension plan to make keeping track of them even easier.
There are two types of workplace pension schemes, Defined Benefit (DB) and Defined Contribution (DC).
In a DB scheme, sometimes called a ‘final salary’ scheme, the amount you receive when you reach retirement age depends on the number of years you’ve been in the scheme and your salary. The benefit of a DB pension is that you know how much income your savings will provide you with, making it much easier to plan for retirement.
Most people nowadays are enrolled in Defined Contribution schemes, where the amount you'll receive when you retire is determined by how much money you and your employer have contributed to your pension, as well as how well the investments your savings have been paid into have performed.
When you’re enrolled in the TPT scheme, your pension savings are invested in one of our default target date funds (TDF). If you want to be more involved in how your savings are invested, you can choose from a number of self-select funds. Investing in self-selected funds allows you to determine the level of risk you're comfortable with taking, and decide if you want to increase your investments in certain markets. It’s good practice to regularly review your investment choices. You can find out more about the investment options available by reading our fund factsheets.
DC schemes also offer more flexible ways of accessing your pension when the time comes. You can access your TPT DC pension from age 55. It’s important to understand the options you have to access your pension so you can choose the one that’s right for you. To find out more, visit our website.
Everyone’s idea of retirement looks different. You might have aspirations of traveling the world or making a dream purchase. Alternatively, you may look forward to a more laid-back retirement, spending more time with family, learning a new skill, or simply enjoying more time to yourself.
It can be difficult to know how much to save and to work out what level of income your savings might give you when you retire. We have a number of tools to help you:
You might also want to consider reaching out for financial guidance or advice. Find out what’s available here.
It’s important to keep an eye on your pension. As a member of TPT, you can do this easily by logging in to your secure online Retirement Savings Account.
If you’ve not registered already, click here to find out how to get access.
The Retirement Savings Account will show you your TPT DC pension. If you have a DB pension you’ll need to access your DB online account.