Workplace pensions

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If you're approaching retirement, Pension Wise is a free and impartial service from MoneyHelper to help you understand what your pension options are.

You can find out about Pension Wise on the MoneyHelper website.

A pension is money you'll use to live on when you retire. Most people get a state pension from the government which covers your basic needs. But it's also a good idea to try and save some extra money in a pension fund, to give you a decent standard of living.

Your employer has to offer a workplace pension scheme by law. They have to automatically enrol anyone who’s eligible - this is called automatic enrolment.

On this page you can find basic information about:

What is a workplace pension scheme

A workplace pension scheme is a way of saving for your retirement through contributions deducted direct from your wages. Your employer may also make contributions to your pension through the scheme. If you are eligible for automatic enrolment, your employer has to make contributions into the scheme.

Most schemes will also provide other benefits, for example, support for your partner if you die.

There are two types of workplace pension schemes:

Occupational pensions

Occupational pension schemes are set up by employers to provide pensions for their employees. There are two different types of occupational pensions:

  • final salary schemes

  • money purchase schemes

Final salary schemes

Final salary pension schemes can also be called defined benefit schemes. In a final salary scheme, your pension is linked to your salary while you're working, so it automatically increases as your pay rises. Your pension is based on your pay at retirement and the number of years you have been in the scheme. Your pension entitlement doesn’t depend on the performance of the stock market or other investments.

In most final salary schemes, you pay a set percentage of your wages towards your pension fund and your employer pays the rest. This means it's usually a good idea to join a final salary scheme if your employer offers one. However, final salary schemes are becoming less common and most employers no longer offer them.

Money purchase schemes

Money purchase schemes can also be called defined contribution schemes. The money you pay into the scheme is invested with the aim of giving you an amount of money when you retire. Your pension is based on the amount of money paid in and on how the investments have performed. You'll usually pay a percentage of your wages into the scheme and your employer may also pay a regular amount in but this isn't always the case. However, your employer may have to offer you automatic enrolment into a workplace pension, in which case they will be obliged to make contributions.

If you're offered a money purchase scheme through the workplace, it can be a good idea to join if your employer makes contributions. However, if your employer isn't going to make any contributions to the pension or you are not yet eligible for automatic enrolment, you may want to compare the benefits of the scheme with personal pensions schemes elsewhere.

For more information about personal pensions offered outside the workplace, see choosing a personal pension.

Other benefits of occupational pension schemes

As well as a pension when you retire, occupational pension schemes often offer other benefits such as:

  • life insurance which pays a lump sum or pension to your dependants if you die while still employed

  • a pension if you have to retire early because of ill-health

  • pensions for your, wife, husband, civil partner and other dependants when you die

Automatic enrolment into a workplace pension

Your employer must enrol you into their workplace pension if you're an eligible employee -this is called automatic enrolment. You'll be eligible if you're:

  • not already in a workplace pension

  • aged 22 or over

  • under State Pension age

  • earning more than £10,000 a year

  • working in the UK

You can opt out of your workplace scheme but it's a good idea to pay into it if you can afford to. This is because your employer has to make a contribution into the scheme as well as you. Also, you’ll get tax relief on the contributions you make into the scheme.

You should get information about any workplace scheme you are entitled to join within two months of starting work. If you don't, contact your personnel or human resources (HR) department.

There are different types of workplace pension schemes with different benefits. It's important to understand the differences so that you can work out whether or not the scheme is right for you and what other options you may have.

Find a tool to help you choose whether to automatically enrol into your workplace pension on the MoneyHelper website.

If you're already in a workplace pension that meets the rules about automatic enrolment, you don't have to join another pension.

You can find more information and frequently asked questions about automatic enrolment on GOV.UK.

You can also find more about joining a workplace pension automatically on GOV.UK.

Group personal pensions and stakeholder pensions through your workplace

Workplace (or group) personal pensions and stakeholder pensions work in a similar way to the ones you can arrange for yourself.

Your employer chooses the pension provider but you will have an individual contract with the pension provider.

Group personal pensions and stakeholder pensions may be an option if you are not eligible to automatically enrol into your workplace pension.

You pay contributions into your pension fund direct from your wages. The money is invested to grow your fund which you use to provide you with a pension when you retire.

The main difference between arranging a personal or stakeholder pension yourself and joining one through your workplace is the amount of control you have over how the money you pay into your fund is invested. With a workplace scheme, the investment choices may be made for you by the provider.

Your employer may also pay contributions into a personal or stakeholder pension but they do not have to - this will depend on the terms of the pension. If your employer won't be contributing, compare what the workplace pension offers with other similar pensions on the market to make sure you're getting the best deal.

Find out more about choosing a personal pension.

You might also want to consider getting independent financial advice.

Finding out about your workplace pension scheme

It's a good idea to get basic information about what your employer is offering when you start work, to help you decide if it's worth joining the pension scheme. Here's some things to find out:

  • are you eligible for automatic enrolment in your workplace pension

  • is it an occupational pension or a personal pension scheme

  • how much are your contributions. This will usually be a percentage of what you earn

  • will the employer also make contributions and if so, how much. If you are automatically enrolled into a workplace pension, your employer has to make contributions up to a minimum level

  • how will the money you pay in be invested

  • how will you know what's in your fund

  • if you decide not to join now, will you be able to join the scheme later.

The amount of your contributions should appear on your wage slip each time you are paid and on your P60 tax information each year. If you think your payments are wrong, speak to your employer straight away and ask them to sort it out.

If you are in a union, they may provide advice and help about your pension scheme.

When should you join the workplace pension scheme

Once you've decided to join your workplace pension scheme, it's best to join as early as possible to get the maximum benefit from your contributions. Some pension schemes don't let you join later, once you've said you don't want to join, so check the rules before you decide.

If you're not sure what the rules are for your scheme, ask your Human Resources (HR) or personnel department or your Union if you're in one.

What if you've already got a pension

There's no limit to the amount you can save up in your pension schemes. This means you can join a workplace pension scheme even if you've already got money saved up in another pension fund or you're still paying into another fund, such as a personal pension.

There are limits to how much tax relief you can get on the contributions you make to your pension, so it might not be worth paying more than you will get tax relief on.

If you're going to pay into more than one pension fund, you should work out your budget to make sure you can afford the payments before you join. 

For more information on how to work out your budget, see Budgeting.

What happens if you change jobs

What you do about your pension when you change jobs depends on what types of scheme you have joined. You may choose to:

  • leave your pension behind in your old employer's scheme to be paid to you when you retire

  • transfer your rights to a new occupational scheme

  • transfer your rights to a personal pension.

It can be difficult to make the right decision without advice, even when you have all the information you need. So unless you are absolutely sure, you should get professional independent financial advice.

There are special rules about what happens to your pension if you have automatically enrolled into a workplace pension and you leave your job. You can find more on the DWP website at and at

For more information about how to find a financial adviser, see Getting financial advice.

Don't forget to let your old pension provider know where you are if you change address later on. It's easy to lose touch and this can make things more difficult when you retire.

You can check what to do if you’re thinking about transferring a pension on the MoneyHelper website.

Pension scams

Pension scams have become more common since April 2015, when new rules allowed people to take some or all of their pension pot as a lump sum. These scams are fake investments designed to con you out of your money. They are often extremely convincing and anyone can be caught out.

You can find out about scams on the MoneyHelper website.

Further help and information

Pension Wise

Pension Wise is a free and impartial service from MoneyHelper to help you understand what your pension options are.

You can find out about Pension Wise on the MoneyHelper website.

Booking an appointment with a pensions guidance specialist

You can book a free appointment with a pensions guidance specialist who will talk through your pension options with you. Appointments will be either over the phone or face to face with specialists from Citizens Advice.

An appointment will be relevant to you if:

  • you have a defined contribution pension pot

  • you're approaching retirement or 50 or over

Book a Pension Wise appointment on the MoneyHelper website, or call 030 0330 1001 between 8am and 10pm, Monday to Sunday. You can also book an appointment by visiting your nearest Citizens Advice.

For more information about personal pensions and to find out about other types of pensions, see Pensions.


You can get free, confidential information and advice on occupational and personal pensions on the MoneyHelper website. They also have an advice service which deals with stakeholder pensions. They don't provide financial or investment advice or recommend products.


GOV.UK is the government website. It has lots of information about the state retirement pension and other types of pensions.

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