Company pensions

For a money purchase/stakeholder scheme

Your pension depends on the following:

• How much you and your employer have paid in

• How well this money has been invested

• The charges deducted

• Annuity rates at the time you retire (an annuity must be bought with at least 75 per cent of your pension fund to provide you with an income for life)

• How much you take as a lump sum. You can take up to 25 per cent of your fund as a tax-free lump sum, however this will result in a lower pension

Money purchase and stakeholder schemes are felt to be riskier than final salary schemes. However, final salary schemes are expensive to run, so more and more employers are closing them to new members or shutting them down completely.