Everything to Know About Pensions

How pensions work and how to save for retirement

Sunniva Kolostyak 20 September, 2021 | 8:10AM
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Staying on top of how the pension system works and how to make the most of your investments is a full-time job. So, here is a guide to everything you want to be aware of when it comes to retirement saving.

Types of Pension

State pension

Simply put, the pension system has three pillars: state, occupational and personal pensions. State pensions are determined based on when you were born and the number of years of national insurance contributions (NICs) you have made. If you are a man born before 6 April 1951 or woman born before 6 April 1953, and have 30 years of NICs, you qualify for a maximum of £137.60 a week. If you were born after and have 35 qualifying years, you get £179.60. The state pension age is currently 66 for both men and women, with plans to stepping it up to 67 between 2024 and 2028, and to 68 between 2044 and 2046. The full state pension for 2021/22 is £9,339 a year.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Sunniva Kolostyak  is data journalist for Morningstar.co.uk