Pension funds in the United Kingdom (UK) - statistics & facts
The number of pension recipients in the UK has increased by a quarter of a million people in less than three years. With continuous obstacles such as rising interest rates adding to a cost of living crisis, a number of the UK`s pension recipients are facing tougher times.
The United Kingdom (UK) pension fund market is comprised of a hybrid system with UK citizens benefiting from either or both a private and public pension scheme. Public pension schemes come in the form of a state pension. The payments provided to the recipients are dependent upon each individual’s National Insurance contributions and age. Private pension schemes come in the form of workplace pensions which have been set up by individual employers, such as the BT pension Scheme (BTPS) or personal pensions typically utilized by self-employed persons. While schemes vary, pension contributions are made primarily through two structures: defined benefit and defined contribution. In a defined benefit policy, the future retirement payment to be received by the policyholder is predetermined or at least a guaranteed minimum amount. However, with a defined contribution scheme, the regular contribution (or “premium”) paid to the scheme is fixed, and the payout received by the policyholder upon retirement is dependent upon the fund’s investment performance. Individuals may also choose to combine these two pension structures, increasing their personal total pension contributions.
The United Kingdom (UK) pension fund market is comprised of a hybrid system with UK citizens benefiting from either or both a private and public pension scheme. Public pension schemes come in the form of a state pension. The payments provided to the recipients are dependent upon each individual’s National Insurance contributions and age. Private pension schemes come in the form of workplace pensions which have been set up by individual employers, such as the BT pension Scheme (BTPS) or personal pensions typically utilized by self-employed persons. While schemes vary, pension contributions are made primarily through two structures: defined benefit and defined contribution. In a defined benefit policy, the future retirement payment to be received by the policyholder is predetermined or at least a guaranteed minimum amount. However, with a defined contribution scheme, the regular contribution (or “premium”) paid to the scheme is fixed, and the payout received by the policyholder upon retirement is dependent upon the fund’s investment performance. Individuals may also choose to combine these two pension structures, increasing their personal total pension contributions.
