What is a pension pot?

A pension pot is for saving towards retirement. You can start withdrawing your money from age 55 (57 from 2028).

Every time you add money, you’ll get a 25% bonus added automatically (this usually arrives at the end of the following month).

We call this a bonus as it’s like free money from the government. It’s actually tax relief, and is to refund tax you’ve paid (or will pay) on your income.

If you pay 40% or 45% tax, you can claim more back via a Self Assessment tax return (we can help point you in the right direction).

As an extra bonus, you also won’t pay any tax as your money grows, so it can grow much larger over time.

Each tax year, you’ll be able to save up to your yearly taxable income (with a maximum of £60,000 per year).

You may pay tax when you start withdrawing it, although 25% is typically tax-free (up to £268,275). How much you’ll actually pay depends on your income, circumstances and tax rules at the time.

Note: the government could change these tax or any other rules in the future, and your overall tax treatment will depend on your individual circumstances.