Personal pensions

What is a personal pension?

Personal pensions are often available as workplace pensions. They can also be taken out by people who don’t currently have a scheme through work or who are self-employed.

Some people choose to pay into a personal pension as well as a workplace pension. They do this to give themselves a bigger income when they retire.

How do they work?

All personal pension schemes are defined contribution schemes. They are a contract between you and the pension provider. Your personal pension has nothing to do with your employer, even if your employer pays contributions into the pension scheme (for example, through a workplace pension scheme).

Read our information on the new rules from April 2015 that allow more flexible access to your savings from the age of 55.

You can normally make regular or lump sum payments into your personal pension scheme. You pay these to your pension provider.

Your pension provider should send you a benefit statement every year. This tells you how much your pension pot is worth and gives you an estimate of how much pension you will get. Your pension pot is the total amount you have saved into your pension scheme.

If you are enrolled in a personal pension scheme through your employer, your pension payments will be automatically taken out of your salary like a workplace pension. Your employer will also make payments into your pension scheme.

If you leave your job or change to another personal pension, you may be able to transfer your pension savings to another scheme or keep paying into the old scheme.

Reducing your hours or stopping work

Because of cancer or its treatment, you may have to:

  • take time off work
  • reduce your hours
  • stop work.

If you are employed and use your holiday allowance to take time off, your pension is not affected.

If you are unable to use your holiday allowance, there are different ways your pension could be affected:

  • If you are getting sick pay, you could continue to pay into your pension as normal, but this is not always the case. Employers have different sick pay schemes. The legal minimum for employers to pay is Statutory Sick Pay (SSP). This is currently £92.05 a week, for up to 28 weeks. There are different rules for agricultural workers. It may not pay enough to cover your pension contributions. But some employers offer more generous sick pay in addition to SSP. This is called occupational sick pay, or company sick pay.
  • If you reduce your working hours and are paid less, this will probably reduce your payments towards your pension.
  • If you stop working and stop paying money into your pension, your final pension will be smaller.

In any of these situations, exactly what happens depends on your work contract and the rules of the pension scheme. To check whether your pension will be affected by time off or reduced hours, talk to:

  • your employer
  • the human resources (HR) department at work
  • the pension scheme manager.

It is also worth checking whether you have any extra benefits with your pension policy. They could help you keep up your pension contributions. When you started your pension, you may have bought a type of insurance that would keep building your pension if you cannot work. This may be called a pension-contribution protection benefit, a waiver of contribution benefit or a waiver of premium benefit. Talk to the scheme provider if you want to check this.

We have more information about managing work and cancer. We also have financial guides who can help you deal with your money worries. Call us on 0808 808 00 00 to speak to a financial guide or benefits adviser.

Retirement and accessing your pension benefits

Your chosen retirement age can be any age from 55 onwards. You are usually able to choose the retirement age you would like to take your pension benefits from, but you can change this at a later date. You can decide to take your pension earlier or later than your chosen retirement age. But you cannot take your pension before age 55, unless this is due to ill health.


All personal pensions are defined contribution schemes. See our section on defined contribution schemes for information on accessing your benefits.

Back to Pensions

Pension overview

A pension is a long-term savings plan. There are different pension schemes available.

Pension changes

Since April 2015, some types of pension have become more flexible.

State pensions

The State Pension is a regular payment you can get from the government when you reach retirement age.

Workplace pensions

A workplace pension is a pension scheme arranged through your employer. There are different types of workplace pensions.

Defined benefit schemes

A defined benefit scheme is when your employer promises to give you a pension when you retire.