What is a Private Pension?

Private Pensions are often called Personal Pensions, and are operated by independent investors.

These may be banks, building societies, insurance companies or other financial institutions. You pay this investor a certain amount, either as a one-off payment or in installments, and they guarantee you a regular pension after a certain time. However, the value of this pension is often not guaranteed. Details of Private Pensions, such as when you can collect your pension, vary depending on the provider and the type of scheme. The value of the pension you receive will often depend on the success of the provider’s investments.

A Private Pension is different from a Company Pension, which is run by your employer.

Your Private Pension counts as taxable income, although you can usually claim tax relief on money that you pay into a Private Pension scheme.