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Are you entitled to the state pension?

What happens when you stop working? If you live in the UK, you have a wide choice when it comes to choosing a plan for your future days. In fact, the British Government has created a wide diversity of retirement plans specifically designed to meet the needs of as many people as possible. A pension is a long-term savings scheme intended to provide workers with an income to live on when they stop working.

One of the most popular schemes in the United Kingdom is currently the state pension, which works a bit differently than the workplace and personal pension. This trust is indeed a periodic payment on behalf of the British Government which is solely based on one’s previous National Insurance contributions. You’ll be given access to a prearranged amount as soon as you reach the retirement age.

For this particular scheme, the date has been moved to 66 years old. Furthermore, not everyone is entitled to the state pension: as a matter of fact, some different rules have been set for this specific trust. First of all, the retirement age for women in the UK is currently based on one’s date of birth: in fact, to get the state pension you have to be born on or before April 5, 1953. On the other hand, if you’re a man you have to be born on or before April 5, 1951.

Everyone else is eligible for a different kind of pension trust, which is called new state pension. In short, unlike other schemes the state pension doesn’t consider when you start claiming your retirement payments, but when you reach the pensionable age instead. Nowadays, you also have the chance to claim your state pension and keep on working. Let’s have a closer look at all the different plans available for British citizens.

All the pension schemes available for people who live in the UK

If you live in the United Kingdom, the state pension isn’t the only plan available for your future. In fact, you can choose between three different plans, each of which has been designed to meet the needs of certain categories of workers.

The workplace/occupational pension

The most widespread kind of retirement plan available for UK citizens is called workplace pension, or occupational pension. There are several rules that characterize this type of retirement fund: for example, your employer will always be required to contribute to your future and help you build your retirement pot. In fact, you will both pay a percentage of your salary each month. The British Government will also help you collect a significant sum through tax breaks. Today, you can choose between two distinct kinds of occupational pension:

  • The defined contribution pension scheme is the most common type currently available: when opening one, both you and your boss will periodically contribute to your pot. Also, the money in your trust will always be invested. This rule has been set to give your savings the chance to grow. However, all investments can be very risky and you might get less than expected.
  • The defined benefit pension scheme works differently: as soon as you turn 55, you’ll be given access to a predetermined amount of money.

The personal pension

The personal pension is really popular as well: if the workplace pension, which is a scheme for employees, this one is intended for independent workers. By opening one, self-employed workers will be granted with an income to live on in the future. If you decide to open this scheme, you’ll be able to choose the pension provider that best suits your needs, how much and how often to put in your trust.