Company Pensions Explained
Company pensions are those that employers create and they are for the express purpose of saving money for their employees, a very worthy aim indeed.
They will usually make a certain fixed contribution to the fund at a certain percentage of your salary basis, and then sometimes will match additional income that you put in as well, so they can quickly grow to a reasonable size with the better or more attractive schemes, from the point of view of the individual.
They may also have other benefits, and these could include death benefit or pension income before retirement age if you have bad health leading to forced retirement.
Most employers will require that regular contributions are made by you in addition as them to your pension.
Become the pension is linked to the employer then normally it will be closed off to you investing more funds, and them doing so on your behalf, when you leave the company. With precious final salary schemes now a thing of the past in the private sector this is a strong reason for many people staying with their original employer until retirement because they have much better schemes than those that are available to people now who just join a company.
Tax relief is a benefit of saving into a pension up to the allowance and up to 100% of your salary per year.