Jargon Buster
Annuity - an investment where you pay a lump sum in return for a monthly income, usually payable for the rest of your life.
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Money-purchase scheme pension - a scheme in which you build up a fund which you convert into a monthly pension when you retire. You usually do this by buying an annuity.
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Occupational pension - one type of pension scheme offered through your work. Your employer usually has to pay into the scheme on your behalf.
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Personal pension - a pension scheme typically offered by insurance companies. Your employer (if you have one) doesn't have to pay anything into the scheme but may agree to do so.
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Private sector pensions - occupational pensions offered by a private company to its employees.
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Public sector pensions - occupational pensions offered by a public sector organisation to its employees. This group includes, for example, people employed by state schools, the NHS, the Police, and Local councils.
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Salary related pension - an occupational pension scheme that promises to pay you a pension based on your salary and how long you have been in the scheme.
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State basic pension - the basic pension paid by the government, based upon the amount of National Insurance contributions you have made (or been credited with). See 'State pensions' for details.
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State Second Pension (S2P) - the state additional pension. See 'State pensions' for details.
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