Pension Basics: Workplace vs SIPP

Understanding the difference between workplace pensions and personal pensions (including SIPPs) helps you maximise contributions and tax benefits.

Workplace pensions

• Auto‑enrolment: Most employees are enrolled automatically and receive employer contributions.
• Convenience: Contributions deducted from salary; often matched by your employer up to a limit.
• Default funds: Many schemes offer age‑based default funds that de‑risk over time.

Personal pensions (SIPPs)

• Flexibility: Choose your own funds, ETFs and shares.
• Control: Suitable for engaged investors who want more choice.
• Fees: Vary by provider and holdings.

Tax relief & withdrawals

Pension contributions typically receive tax relief subject to limits, and access is from the normal minimum pension age (check current rules). A portion may be taken tax‑free at retirement; the rest is taxed as income.

Which is right for me?

Many start with workplace pensions to capture employer contributions (“free money”), then consider additional contributions or a SIPP for flexibility.

Disclaimer: Educational content only — not financial advice. Pension rules change; confirm details before acting.

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