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What are my pension options?

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There are many different types of pension options out there. From defined contribution pensions and defined benefit pensions to SIPPS, there’s a different pension to suit every level of experience and income.


Your pension options

With pension schemes becoming compulsory for every UK employer, most people will now have a pension in some form. The type of pension you have dictates how much management your pension requires, and whether or not you will need to choose your investment options yourself.


Defined Contribution

In a Defined Contribution pension scheme, the total value of your pension pot is based on how much money you have paid in, and other factors such as the worth of the stocks and shares the money is invested in.

This type of pension does allow individuals to choose where they want to invest their funds. However, pension providers can help by offering a range of broad strategies that are likely to be suitable for your needs. Alternatively, your pension provider can also make default investments for you if you choose not to decide, with the investments being designed to suit as broad a range of people as possible.


Defined Benefit

This is sometimes also referred to as a “final salary” pension. It’s based on your career salary and takes into account how long you’ve worked for your employer. These don’t require you to decide where to invest your money. It is your employer who will take responsibility for where your money is invested and also the risks involved.



A self-invested personal pension, or SIPP, enables individuals to choose their own investments to put their savings into, giving you extra flexibility. It’s essentially a ‘do-it-yourself” pension. However, despite the flexibility and control a SIPP offers, it also tends to have higher risks attached, so it should only be considered by savers with larger pensions, who are more experienced and understand the risks associated with taking control of their own personal pension investments.

The rules on how you can withdraw from and contribute to a SIPP are the same as that of a traditional pension scheme. They also follow the same legislation as a normal pension scheme, which states that funds can’t be accessed until or after your 55th birthday.


Unlocking your pension pot

The law currently allows people aged 55 onwards to access their money early. This is known as pension unlocking. With 25% of your pension available tax free, you have the option of investing this money before you retire, and cashing it in when you require it.

Pension unlocking isn’t suitable for everyone, and you must be aware of all of the risks and other pension options before making a decision to unlock your pension pot.


Where to invest

There are lots of pension options when it comes to investment funds, whether it’s property, bonds or shares, and these are split into two main fund avenues:

Specific assets – e.g. a fund focusing on investments in European commercial property

Mixed assets – e.g. a fund investing in both shares and bonds in the UK and abroad

The mixed assets option is the most popular of the two, mainly because a more diverse portfolio of investments is known to be a good way of managing risk.



We’re experts in helping customers claim money back on mis-sold SIPPs. If you have a SIPP and you think you might have been given incorrect information, no advice on the risks, or were pressured into investing, then the chances are your investment was mis-sold and you could be owed compensation.


If you believe you’ve been mis-sold a pension investment, our experienced legal team can answer any questions you might have and get your claim started.