A workplace pension is a way of saving for retirement that’s arranged by the employer. Some workplace pensions are called ‘occupational’, ‘works’, ‘company’ or ‘work-based’ pensions.
A percentage of pay is put into the pension scheme automatically every payday. In most cases, both the employer and employee put money into the pension scheme, and get tax relief from the government.
The money is used to pay an income to the employee for life when they start getting their pension. Usually the employee can take some of the workplace pension as a tax-free lump sum at retirement.
If the amount of money saved is quite small, it may be possible to take it all as a lump sum. 25% is tax free but there may be Income Tax on the rest.
The pension can’t usually be taken out before age 55 at the earliest - unless there is serious illness.
NOT ALL WORKPLACE PENSIONS MEET THE QUALIFYING RULES, IF YOU HAVE AN EXISTING WORKPLACE PENSION YOU SHOULD TALK TO THE EXISTING PENSION ADVISER