Company pension: What is it and how can it benefit you?

Understand what a company pension is and why it is important for you as an employee.

15:15 28 February 2013

Building your pension is one of the best things that you can do when it comes to securing your golden years. The earlier you start, and the more money you put into your pension account, the more likely that you’ll have a comfortable retirement. 

 

One of the best ways to get started is through a company pension. 

For an employee, participating in a company pension scheme can offer you several benefits, such as pension contributions. However, keep in mind that this doesn’t automatically mean that you’ll be offered by your employer a company pension scheme. Instead, you maybe offered stakeholder or group personal pension scheme. 

 

The company pension law is still evolving. Soon, employers will be required to automatically enroll all eligible employees into a work-based scheme. They are also more likely to offer contributions of at least 3per cent of your pensionable earnings. 

 

Keep in mind that employees have the choice to opt out for any reason. For example, if after       re-evaluating your pension needs, you decided to transfer out of a scheme, you’ll be allowed to do that at any time.

 

However, bear in mind that this can significantly affect your retirement savings. So, before you make any huge decision, make sure to consult with independent financial advisor.