Your top 10 questions about pensions explained

We’ve pulled together a list of the top 10 most frequently asked questions about pensions to help you understand what pensions are, why you need them and how much you need to save.

1. Do I have to be working to start a pension?
   No, you can start a pension if you’re not working but you can only pay in £3,600 per tax year.
   
   
2. How old do I have to be to start a pension?
   There is no minimum age to start a pension. But the earlier you can start contributing the better you’ll be set up for the future and the more you’ll be able to save.
   
   
3. How much can I pay into a pension?
   Currently, you can pay up to £40,000 per tax year into a pension.
   
   
4. Can you have more than one pension?
   You can actually have as many pensions as you want but be careful not to pay more than the maximum allowed per year (£40,000).
   
   
5. What is auto-enrolment?
   This means your employer has to offer a workplace pension and automatically enrol all eligible employees.
   
   
6. How much would I get from a State Pension?
   The current state pension is £179.60 per week but this depends on your national insurance record of contributions. You can check your National Insurance Contributions here.
   
   
7. How much should I pay into a pension?
   The earlier you start your pension the better because it gives you more time for your money to grow in value. A rough rule of thumb is to take the age when you first started saving into a pension, halve it and pay that percentage into your pension. So, for example, if you started saving at 40 you should aim to pay 20% of your salary into your pension. Whereas at the age of 20, aim for 10% 
   
   
8. What happens to my pension if I leave my current employer?
   The money in your pension still belongs to you. You can take the benefits when you retire or take it with you as a lump sum. You can also start a different workplace pension and combine the two. 
   
   
9. Can I increase my contribution to a workplace pension?
   Yes, you can pay more into your workplace pension up to the annual maximum limit. Your employer should be able to arrange this for you. Your employer might not be able to match your increased payment as they’ll probably have an upper limit so make sure you double-check. 
   
   
10. How much do I need to retire?
    This is hard to answer because we all have different needs, expectations and requirements for retirement so everyone’s retirement figure is different. This article from Pension Bee has a pretty good explanation of how much you need to retire in the UK.