The pension glossary

📊 Annuity
You can use your pension cash to buy an annuity. You pay a big financial company a bunch of cash, and they’ll give you a guaranteed bunch of cash each year - kind of life a salary during retirement.

📥 Contribution
Easy one: when you save money into your pension.

🧮 Defined Benefit Pension (DB)
How much you’ll get from your pension is based on what your salary is and how long you have work for the company. These are getting less common because they’re super expensive.

👛 Defined Contribution Pension (DC)
Like a simple savings account for retirement. You and your employers put cash in, and the government gives you some tax bonuses, and it’s invested for you for later on.

👨‍👩‍👧 Dependant
Usually, this refers to your partner or kids.

💷 Drawdown
A complicated word for taking money out of your pension as income when you’ve retired.

⛔️ Opt Out
Employees can duck out of making pension savings (needs to happen within a month of starting). Oh, and if you opt out, your employer stops making contributions too.

🎅 Pensioner
You one day. Old people.

🤑 State Pension Age
How old you need to be to start getting your government pension. Which is currently £168 per week (maximum amount).

🎁 Tax Relief
The tax you’d have paid to the government, instead goes into your pension. Phew.

💎 Uncrystallised Pension
A pension that you haven’t taken any cash out of yet for income in your retirement. Why crystals though? 🤷‍♀️