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Can you rely on the State Pension?

For men born on or after 6 April 1951 and women born on or after 6 April 1953 the State Pension is expected to be £159.55 a week1.

That is only likely to provide for your very basic needs and it might need to last you a long time.

If you want to enjoy your retirement to its fullest, and for as long as possible, pension savings to top up your State Pension make sense.

All pensions offer tax advantages for savers, and once you've reached the age of at least 55, you can normally take up to 25% of your savings back out as one or a series of tax free lump sums. The rest is normally taxed as income at your marginal rate(s) of income tax

Important information

Please remember the value of your investments and any income from them can go down as well as up. The value of your pension savings may be less than you paid in.

Before you choose a SIPP, make sure you understand its aims and risks. Alliance Trust Savings does not give advice. A SIPP requires active management and investment expertise. You should make sure you review your investments regularly. You normally cannot take an income from your pension until age 55.

Laws and tax rules may change in the future without notice. The information here is our understanding in April 2018. This information takes no account of your personal circumstances which may have an impact on tax treatment.

1 Source gov.uk March 2018 - The new State Pension

Saving for a pension through work

This is the probably the most common way for people to start saving for a pension today. There are two main types of workplace pension.

Defined Contribution

  • The type of pension offered by most employers today.
  • What you get back depends on how much you pay in, how investments perform and how you plan to take income from your savings.
  • You’ll have some choices about how to take your pension savings when the time comes.

Defined Benefit

  • What you get back depends on your salary (how much you earn) and how long you work for your employer.
  • You normally won’t get much choice in how you take your pension savings but you will be paid a sustainable income that can be difficult to match through a Defined Contribution scheme.
  • Defined Benefit pensions can be a very valuable benefit. To be offered one when you start a new job is quite rare these days.

Personal Pensions

All personal pensions are the ‘defined contribution’ type and you can have personal pensions as well as workplace pensions.

There are three main varieties of personal pension to choose from.

Stakeholder pensions

Relatively simple pensions that have to meet government set standards covering payments, charges and other terms and conditions.

Individual personal pensions

Usually offered by life companies they tend to offer a fairly limited choice of investments (although more than stakeholder pensions).

Self invested personal pensions (SIPPs)

These are for people who want to choose from a wide range of investments.

There are two types of SIPP

Platform SIPP

These are managed online and you can usually choose from a wide range of common investment types like funds, exchange traded funds, investment trusts, stocks and shares. The Alliance Trust Savings SIPP Account is a platform SIPP.

Find out more


These offer more complex investments like unquoted shares and commercial property. The charges are often higher than for a platform SIPP and it’s likely you’ll need a Financial Adviser to use one.

How much could your SIPP be worth?

Use our savings tool to work out how much you might be able to save for retirement.
Use our savings tool

savings tool

Alliance Trust Savings Limited is a subsidiary of Alliance Trust PLC and is registered in Scotland No. SC 98767, registered office, PO Box 164, 8 West Marketgait, Dundee DD1 9YP; is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, firm reference number 116115. Alliance Trust Savings gives no financial or investment advice.