The pension glossary

12 Jan 2024

Navigating the world of pensions can feel like learning a new language. Here's a quick glossary to help you understand some common terms you might encounter.

Annuity

An annuity is a financial product that pays out a fixed stream of payments to an individual, typically used as a means of securing a steady income for retirees.

Pension Beneficiary

The person who receives your pension benefits after your death.

Pension Contribution

The amount of money that you or your employer deposits into your pension account.

Defined Benefit Pension (DB)

This type of pension promises a specified pension payment, lump-sum (or combination) on retirement that is predetermined by a formula based on your earnings, length of service and age.

Defined Contribution Pension (DC)

With this type of pension, the amount you receive on retirement depends on how much was paid in and how well the investment fund performs.

Drawdown

This is a way of taking money out of your pension pot to provide you with a regular retirement income by reinvesting it in funds specifically designed and managed for this purpose.

National Retirement Age

The age at which a person is eligible to start receiving state pension benefits.

Opt Out

Choosing not to participate in a pension scheme offered to you by your employer.

Pension Investment Fund

The fund that your pension savings are invested in with the goal of long term growth.

Pension Lump Sum

A one-time, lump sum payment drawn from a pension pot.

Pension Pot

The total amount of money saved up in your pension plans which you draw on for your retirement.

Pension Tax Relief

The tax benefit you get on your pension contributions, where some of the money that would have gone to the government as tax goes into your pension pot instead.

Pension Tracing

The process of finding lost pensions from previous employers that you may have forgotten about.

Pension Transfer

Moving your pension from one scheme to another.

Pension Withdrawal

Taking money out of your pension scheme, either as a regular income or as a lump sum.

Private Pension

Any pension scheme arranged yourself or by your employer that is not part of the state pension provision.

Self Invest Personal Pension (SIPP)

A type of UK government-approved personal pension scheme, which allows individuals to make their own investment decisions from the full range of investments approved by HM Revenue and Customs.

State Pension

The regular payment people receive from the government once they reach the national retirement age.

Uncrystallised Pension

Pension money that has not yet been touched or drawn as benefits after reaching retirement.

SOME IMPORTANT THINGS YOU SHOULD KNOW
Pensions are long terms investments. It’s important that you know the value of your investment could go up as well as down. You could get back less than you put in. Past performance is not necessarily a guide to the future and pension investing is not intended to be a short-term option. Penny does not provide financial advice so please be sure that this investment is right for you.

Your current pension might have special benefits that will be lost if you transfer to Penny. These special benefits include: Guaranteed Annuity Rate (GAR), Guaranteed Bonus Rate (GBR), Guaranteed Minimum Pension (GMP) and Protected Tax Free Cash (PFTC) over 25%. If this is the case, we will not transfer your pension, as you may be better off not transferring in these cases.

Your current provider might charge you a transfer-fee to transfer your pension to Penny. If this is the case, we will not transfer your pension, as you may be better off not transferring in these cases.

You should consider the charges and benefits before transferring your old pensions to your new plan, and consider whether the risk and reward profile of the investments offered matches your needs. It may be that your current provider has lower fees than Penny - where this is the case, we recommend that you carefully consider whether to transfer your pension to Penny, as you may be better off not transferring in these cases.

If you are in any doubt about proceeding you should contact a financial adviser.
© Copyright 2024 Penny Technology Limited. Company registration: 11999643. FCA Reference Number: 931299.
SOME IMPORTANT THINGS YOU SHOULD KNOW
Pensions are long terms investments. It’s important that you know the value of your investment could go up as well as down. You could get back less than you put in. Past performance is not necessarily a guide to the future and pension investing is not intended to be a short-term option. Penny does not provide financial advice so please be sure that this investment is right for you.

Your current pension might have special benefits that will be lost if you transfer to Penny. These special benefits include: Guaranteed Annuity Rate (GAR), Guaranteed Bonus Rate (GBR), Guaranteed Minimum Pension (GMP) and Protected Tax Free Cash (PFTC) over 25%. If this is the case, we will not transfer your pension, as you may be better off not transferring in these cases.

Your current provider might charge you a transfer-fee to transfer your pension to Penny. If this is the case, we will not transfer your pension, as you may be better off not transferring in these cases.

You should consider the charges and benefits before transferring your old pensions to your new plan, and consider whether the risk and reward profile of the investments offered matches your needs. It may be that your current provider has lower fees than Penny - where this is the case, we recommend that you carefully consider whether to transfer your pension to Penny, as you may be better off not transferring in these cases.

If you are in any doubt about proceeding you should contact a financial adviser.
© Copyright 2024 Penny Technology Limited. Company registration: 11999643. FCA Reference Number: 931299.
SOME IMPORTANT THINGS YOU SHOULD KNOW
Pensions are long terms investments. It’s important that you know the value of your investment could go up as well as down. You could get back less than you put in. Past performance is not necessarily a guide to the future and pension investing is not intended to be a short-term option. Penny does not provide financial advice so please be sure that this investment is right for you.

Your current pension might have special benefits that will be lost if you transfer to Penny. These special benefits include: Guaranteed Annuity Rate (GAR), Guaranteed Bonus Rate (GBR), Guaranteed Minimum Pension (GMP) and Protected Tax Free Cash (PFTC) over 25%. If this is the case, we will not transfer your pension, as you may be better off not transferring in these cases.

Your current provider might charge you a transfer-fee to transfer your pension to Penny. If this is the case, we will not transfer your pension, as you may be better off not transferring in these cases.

You should consider the charges and benefits before transferring your old pensions to your new plan, and consider whether the risk and reward profile of the investments offered matches your needs. It may be that your current provider has lower fees than Penny - where this is the case, we recommend that you carefully consider whether to transfer your pension to Penny, as you may be better off not transferring in these cases.

If you are in any doubt about proceeding you should contact a financial adviser.
© Copyright 2024 Penny Technology Limited. Company registration: 11999643. FCA Reference Number: 931299.