Pensions generally fall into two categories: defined contribution (DC) pensions and defined benefit (DB) pensions.

Defined Benefit (DB) Pensions
DB pensions are based on a combination of your salary and the number of years you’ve been part of the scheme. Your employer builds up a fund to pay the pension you’ve been promised, ensuring a guaranteed income during retirement.

Defined Contribution (DC) Pensions
DC pensions are based on contributions made by you and your employer, along with returns from your chosen investments. Over time, you accumulate a pot of money to fund your retirement.

Hybrid Pension Schemes
Some pension schemes combine elements of both DB and DC benefits. These are known as hybrid schemes, offering a mix of guaranteed income and investment-based savings.

Then there are workplace pensions, personal pensions and the State Pension.

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