Individual pensions are pensions that you keep, regardless of whether you move from one company to another. They can also be set up alongside a workplace pension, or even when you're receiving the State Pension. If you're self-employed or not working, you can also use an individual pension to help save towards your retirement.
All individual pensions benefit from tax relief, within specific limits, meaning that more of what you earn will go towards your retirement savings.
The final amount of money you get out of any type of individual pension is based on what you put in and how the fund performs over time. The value of your investment can go down as well as up, so you might not get back the amount you put in.
A personal pension is your own private pension that you can take from job to job. It's ideal if you don't have access to a workplace scheme or are self-employed. Essentially, you pay money into your plan and choose where to invest it from a range of funds that can be managed on your behalf.
You could also have a group personal pension with your employer. They will choose which provider runs your scheme, but your pension will be an individual contract between you and the provider.
Stakeholder pensions are similar to personal pensions in that you pay money in and invest in a range of funds. They're lower cost and can be used if you can only make smaller amounts of payments to help fund your retirement.
This is a specialist type of pension that gives you more choice over where your money is invested. So, if you're comfortable with taking a higher degree of risk, you can make your own investment decisions with a SIPP. You should seek advice if you're interested in this type of pension.
Speak to your employer to get more information on the workplace pension scheme.
Each type of individual pension has it's own benefits and considerations, so if you're unsure if an individual pension will be right for you, please speak to a financial adviser.
Our articles, guides and videos can help you learn more about saving in a pension and retirement planning.
As you fund an individual pension yourself, the more you pay in, the more potential there is for you to achieve the retirement you want.