What is a pension?
A pension is a fixed fund that is paid to an individual at regular intervals in consideration of past services, age, merit, injury, poverty or loss sustained etc. There are many types of pensions including employment-based pensions, state pensions and disability pensions.
Where have you heard about a pension?
Pensions are discussed regularly by everyone from banks and employers to the media and even family and friends. Pensions hit the news in July 2017, when it was reported that the pension age was increasing seven years earlier than planned.
What you need to know about a pension.
When an individual retires, he/she can either draw money from their pension pot or sell the cash to an insurance company in exchange for regular income until death (annuity). Pensions granted upon retirement are usually referred to pension schemes in the United Kingdom, or retirement plans in the United States. A great thing about pensions is that they guarantee a certain payout at retirement. However, an increasing issue with pensions is the challenge of an ageing population, which is leaving fewer workers per each retired person.
Find out more about a pension.
Understand pensions further by reading our definitions of pension fund and pension buyout.