All pensions are income that has been deferred, in the hope – if not always the expectation – that the cost of putting money aside now will be rewarded at a point in the future. At a time when you have neither the inclination or, perhaps, the capacity, to earn it by working.

Everyone’s circumstances are different

No two individual circumstances are alike, what follows should be taken as being qualified with phrases such as ‘for most of us’ and ‘in all but rare cases’ and the like, but we hope that it will act if nothing else as a set of guidelines or reminders to help you work out your own entitlements and what you can do with them.

As with the safety presentation on a flight, even if you think you know it, do pay attention: nearly everyone gets a surprise when they look into it, not always pleasant. And again as with a flight, you may get only the one chance….

State pension

Saving for the basic state pension via National Insurance contributions is compulsory, in effect, for everyone working in the UK.

Some will also have been – or be – contributing to an additional state pension, currently called the State Second Pension (S2P) and formerly known as the State Earnings-Related Pension Scheme (SERPS).

Your state pension will broadly depend on how many years you have paid NI for, although there are exceptions, for example, for married women.

For independent information and guidance from the Pensions Advisory Service on your state pension entitlement, please click here.

For a state pension statement, please click here.

An additional pension

But many, if not most, people nowadays have an additional pension. This may be associated with your employer, past or present – an occupational pension – or it may be a personal pension, whether you are employed or self-employed.

The rules relating to personal pensions, which include stakeholder pensions, are complex; again, the Directgov or the PAS websites are helpful.

Directgov in particular will help you trace pensions to which you may have contributed in the past but have lost track of.

These additional pensions usually let you take a lump sum when you retire, which will reduce the amount of pension you receive.

There is also now generally more flexibility about the age at which a pension can be taken, but you must check with the schemes to which you belong

Please note

The information which we provide through Lasting Post is in outline for information or educational purposes only. The information is not a substitute for the professional judgment of a solicitor, accountant or other professional adviser. We cannot guarantee that information provided by Lasting Post will meet your individual needs, as this will very much depend on your individual circumstances. You should therefore use the information only as a starting point for your enquiries.