Defined contribution pension
A defined contribution pension builds up a pot from contributions and investment growth, and the amount you receive at retirement depends on the pot's value.
Also known as: DC pension, money purchase pension, defined contribution
Most workplace and personal pensions today are of this type. There is no guaranteed income. Investment values can fall as well as rise, and charges reduce the pot.
At retirement you can usually take up to 25% tax free and choose how to use the rest, for example an annuity or drawdown.
Free, impartial guidance is available from MoneyHelper and Pension Wise. Be wary of any unsolicited offers about your pension or investments.
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10 min readReadThis page provides general information only. It is not personalised financial, legal or tax advice, and rules and figures can change. Your situation is unique — please check official sources such as GOV.UK and MoneyHelper, and speak to a qualified, FCA-authorised adviser before making important decisions about your money.