Understanding Money Purchase Pensions

Money purchase pensions differ from final salary schemes in that the investment risk is the burden of the scheme member rather than the employer and the ultimate pension pot willl not be accurately known until shortly before the pension is drawn.

The pension benefits of money purchase schemes depend upon:

  • Investment returns
  • Total amount contributed
  • Tax legislation
  • Charges
  • Annuity rates at retirement

Whilst you will be aware of the level of contribution both you and your employer are making to your money purchase pension, the final amount payable will not be known.

Should you leave the scheme early, your fund will remain invested in the same way as before and the amount you have accumulated by retirement will be used to buy an annuity.

To understand more about the benefits of money purchase pension schemes why not contact our friendly team today and they can put you in touch with a FCA regulated adviser for personalised advice on your pension options.

Request a Call Back

Please complete the form below and we will get back to you within 24 hours