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We’ve taken a look at the top UK pension-related questions people have been entering into Google.
This question crops up quite a lot and depends on a case by case basis. In short, there are three main types of pensions you may have an entitlement to; workplace, private and state.
In order to receive your full UK state pension (which currently pays retirees £134.25 per week in retirement), you will need to ensure you make 35 full years of contributions. These contributions are mandatory whilst working in the UK and optional whilst working outside the UK.
Want to learn more about your current entitlement and how you can contribute from overseas? Click here.
There are two main types of UK workplace pension; defined contribution & defined benefit. Defined contribution pensions are funded by both the employee and employer. In contrast, defined benefit pensions are fully funded by the employer and are designed to pay members an ongoing retirement income until death.
Unsure what pensions you have in the UK? Click here to download our UK pension finder form.
Private pensions are set up by individual investors with private banks or investing institutions.
The current age at which people can access their UK state pension is 67.
Workplace pensions & private pensions
The age at which you can draw from a workplace defined benefit or defined contribution pension or a private pension is dependent on the scheme. Most schemes allow members to start drawing benefit without penalty between the age of 55 and 65. To find out the rules of your scheme, click here.
This again depends on the scheme rules.
All defined contribution schemes pass the entire pension pot to the named beneficiary upon the death of the member.
Once again different schemes have different rules, the majority of schemes pass 50% of the ongoing retirement income to the spouse. Most schemes do not allow members to list a beneficiary in the case where there is no spouse. Certain schemes pass benefits onto children below a certain age. In the absence of a spouse and children, the majority of defined benefit arrangements terminate.
Members of defined benefit schemes may be eligible to apply for a cash equivalent transfer value. This is a lump-sum cash amount that will be offered in exchange for ongoing retirement pension benefits. This amount can be anywhere between 18-40 times the amount of the annual income.
For example, if a member was being offered £30,000 per annum in retirement. Members may be offered between £540,000 and £1,200,000 as a cash equivalent transfer value.
To find out what you may be offered in exchange for your UK defined benefit pension, download our UK pension finder form.
You can receive your UK State Pension when you are living overseas. If you move overseas after you have started to receive your State Pension, and payment is made directly into your bank or building society, the payments can continue, but you should let the pension service know when you are going to leave the UK.
Do you have a question we haven’t covered? Click here and we will be happy to answer.