How do you set up a pension?

There are a number of different types of pension you can have, for most people they will not need to set up their own pension as they will be part of a company wide scheme. The sooner you start a pension the more you will accumulate, however some argue you should only start maximising your contributions when you start earning more which may be in later life.

Automatic enrolment at your employment

If you have worked as an employee i.e not self-employed, anytime since 2012 you will have been auto enrolled into a pension, unless you have decided to opt out,  into a pension and you and your employer will have been contributing.  If you do not know about your company pension then speak to your HR department or Payroll and they can usually tell you what your contributions are and how to access your pension. In most company pension plans you can increase your contributions and these may also be mirrored by your company.

State pension

As soon as you are paying National insurance through your employer or through self assessment tax return, if you are self-employed you will be automatically enrolled into the state pension. 

(SIPP) Self invested Pension Plan

A SIPP is a 'DIY' pension which is not related to your company. A pension is a tax efficient way of saving especially if you are a high earner (over 100k a year). There are advantages with a SIPP, such as you have more control over where you invest and when you take the money out. You wil need to decide whether you decide where to invest the money or you go to a platform that will invest the money for you based on your preferences.
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A SIPP like all investments can go down as well as up, also there may be charges
you need to factor in.

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