A personal pension is a flexible, tax efficient way individuals can save for their retirement.
It is a type of private ‘defined contribution’ or ‘money purchase’ pension arrangement that is usually set up between a pension scheme provider and an individual.
Both workers and the self-employed can choose to have personal pensions. Workplaces may choose to make contributions to a worker’s personal pension arrangement, although they are not required to do so.
There are different types of personal pensions including stakeholder pensions and self-invested personal pensions.