Workplace pensions are an important part of employers’ benefits and since auto-enrolment was introduced in 2012, all employers must provide a workplace pension for workers aged 22 and over who earn more than £10,000.
There are two main types of private pension: defined contribution (DC), a pension pot based on how much is paid in, and defined benefit (DB), usually a workplace pension based on salary and how long an employee has worked for their employer.
A third type, a collective defined contribution or CDC pension, lies somewhere in between with the employer and employee contributing to a collective fund which provides an income in retirement.