A personal or private pension is a way of financial planning for your retirement. Each month, you’ll contribute an amount to your pension, which you’ll arrange with a personal pension provider like True Potential Investor. You can also make ad hoc contributions as you see fit.
Usually, the money you invest is put into stocks, shares and other investments with the aim of increasing your overall funds ahead of your retirement. You can control where your money is invested, as well as the associated level of risk that you are comfortable with.
For each contribution you make, your pension provider will claim tax relief at the basic rate and add it to your overall pension pot. Higher and additional rate tax payers are usually able to claim more via self-assessment to HMRC.
By retirement, you should have a sizeable pension pot that you can use during retirement. However, the amount you accumulate will depend on the following:
Once you retire, you can: