What is a Pension?

Baby_A

Ok this may sound stupid to alot of you but can someone tell me in clear english what a pension is?

Its something I have never really looked at, but would like to have some security for my daughter. Both me and my husband have the option of joining a pension through work. Is it as simple as we put % amount in and the employer matches it (depnding on t's and c's), then when we retire we get it all back?

What happens when I leave my job, do I start a new pension? Or continue paying in my existing one without employer contributions?

Is there anything I should be looking out for in the t's and c's for the employer pension (with prudential)?

Im confused!

dunstonh

Is it as simple as we put % amount in and the employer matches it (depnding on t's and c's), then when we retire we get it all back?

Depends on type of pension. Different schemes can work different ways. However, the idea is that you put something in and you get something out at the end. What you get out will depend on the type of scheme.

What happens when I leave my job, do I start a new pension? Or continue paying in my existing one without employer contributions?

Depends on the type of pension. Some are portable. Some would be stopped and you would need another if you still wanted to make pension contributions.

Is there anything I should be looking out for in the t's and c's for the employer pension (with prudential)?

As its with Prudential, it will be a money purchase scheme and there will be a range of investment funds. You should view this like any investment and pick multiple funds across the range and put a percentage spread to suit YOUR attitude to investment risk. Never invest in just one fund.