How do I start a pension?

Samantha Packham
Samantha Packham
Pension Adviser



  • Starting a private pension
  • What pension should I get?
  • How much should I save?

If you’re smart, you'll be wondering how to get yourself set up with a pension. Having a pension means you’ve got money tucked away for when you need it, often increasing in value as the years go by, so when you retire, you can live comfortably.

Since October 2012, companies have to offer their employees a workplace pension scheme and have to automatically enrol you in it every three years. So if you’ve been working for a while and haven't opted out of the plan, chances are you already have a pension set up! But whether you have a workplace pension or not, you always have the option of starting a private pension for yourself.

Starting a private pension

You can set up a pension with a private company. These can be personal pensions or stakeholder pensions (depending on the rules they follow — stakeholder pensions are a type of personal pension that have to meet certain standards on security and charges) but as ‘defined contribution schemes’ (sometimes known as ‘money purchase’) it all comes down to what you put into it.

Unlike a workplace pension, where your employer probably contributes, your private pension is just your money going in (with added tax relief) — but it does mean that you get more control over who runs your pension, the funds it's invested in, and your options at retirement. To set up a private pension, you'll need to talk to a private pension provider - or easier, discuss your options with a pension adviser who'll be able to find the best choice for you.

What pension should I get?

That really depends on what you want! While in workplace pensions you're generally obligated to enrol in what your employer has set up. If you’re looking for a private pension, there's a wide variety of different choices available. It's always smart to talk to a pension adviser to find a pension that's right for you.

And if you're worried that what you want at 30 might not be the same as what you want at 40 (or even 35!), don't worry - pensions can be transferred from one pot to another so you rarely miss out on specific options.

How much should I save?

This is the million-dollar question and the answer is different for everyone based on their lifestyle and ambitions for retirement. The one thing that is true for everyone is to ‘save as much as you can afford’. Beyond that, there are some ways to help you look at how your retirement plans impact your pension contributions. Read our blog for money hacks and saving tips.

Is it too late to start a pension?

It's certainly never too early to set up your pension! The earlier you do, the more time you have to contribute money into it and the more time it has to grow with the funds - just like any investment, it's always going to benefit from being there for a longer time.

On the other hand, you might be wondering at age 50 or 55 whether it's worth starting so close to retirement age, since it might not be very long until you take your pension. But there's some definite benefits to making contributions into a pension plan rather than just keeping it in your bank account. For one, there are certain tax advantages. And private pensions are kept in investments — in a lot of cases you can pick pension funds that gradually move into lower risk options closer to retirement without you doing anything, so your pension is generally more secure against inflation and changes in the market.

We can help you set up a new personal pension, here's a description of our service.

Start a new pension or combine old pots into a personalised plan today.