About Us Consumers Advisers Employers Media
You are not logged in.
Consumer > Why have a pension? > Types of pension
Types of pension
Most people are likely to need to supplement their retirement income with some form of pension saving, but what types of pension are there?
In basic terms there are two main types of pension offered by insurance companies:
- occupational pensions (also known as company pensions)
- personal pensions (including stakeholder pensions)
Occupational pensions are set up by employers for employees. Employers will make payments on behalf of employees, whilst employees may or may not need to contribute themselves.
Personal pensions tend to be taken out by individuals, for example, those that are not eligible to join an occupational pension, such as the self-employed, or those that wish to top up their retirement savings.
A stakeholder pension is a type of low cost personal pension introduced by the Government in 2001. These are primarily aimed at low and moderate earners.
Some employers provide group personal pension or group stakeholder pension arrangements to their employees. Rather than being classed as an occupational pension these are effectively a collection of individual pension policies that benefit from common charges and features and have one central collection point for payments. Employers will normally make payments to these types of plans, but are not obliged to. One benefit of this type of pension is that you can take it with you if you leave your employer.
Both occupational pensions and personal and stakeholder pensions offer tax relief on payments and usually allow part of the money saved to be taken as a tax-free lump sum.
Find out more about Scottish Life's personal pension plans and stakeholder pension plans in the individual pensions section.
If your employer offers a group pension and/or you want to find out more about employer sponsored pensions, further details are provided in the group pensions section.
Back to top 
Legal Disclaimer
© Scottish Life, St Andrew House, 1 Thistle Street, Edinburgh, EH2 1DG.
Scottish Life is a division of Royal London and markets products produced by Royal London. Royal London consists of The Royal London Mutual Insurance Society Limited and its subsidiaries. The Royal London Mutual Insurance Society Limited provides life and pension products, is a member of the Association of British Insurers and is authorised and regulated by the Financial Services Authority, registration number 117672. Royal London Marketing Limited acts as an insurance intermediary for general insurance products and is authorised and regulated by the Financial Services Authority, registration number 302391.
