Pension Companies

Pension companies - what are they?

Providers that manage pension pots. They collect contributions from workers and employers and invest them over many years, so that the saver receives an income in retirement. Examples include Aviva, Legal & General and Scottish Widows.

Pension companies - why are they important?

The State Pension alone may not be enough to live on. Pension companies help people build up a private retirement income, so they are less reliant on the state and more able to keep their standard of living when they stop working.

Pension companies - advantages

You get tax relief on contributions, and employers often add money too (for example through auto-enrolment). Investments can grow over decades, and a pension can provide a steady income for life or a lump sum.

Pension companies - disadvantages

Money is locked away until at least the minimum pension age. The value of investments can go down as well as up, so the final pot is not guaranteed. Management charges reduce the pot, and a poor choice of fund can leave you with less.