Pension myths

The pension basics

1. I’ll pay into it when I’m older – no-one my age pays into a pension

Actually the opposite is true. For example in 2024, 8 in 10 eligible employees were paying into a workplace pension.

A pension pot is actually an investment in the stock market. When you put money into your pension savings, we invest it in company shares (among other places) with the aim of helping your savings grow. So the sooner you start paying into your pot, the more time your money has to either grow or get through any stock market ups and downs.

2. If I move jobs, I’ll lose all the money I’ve saved with that employer

The money in your pension pot belongs to you. And it’s looked after by a provider that’s completely independent of your employer.

Moving to a new job won’t make any difference to it, though your new employer will probably set up and start paying into a new workplace pension for you. That’s why people often end up with many different pension pots. If that happens to you, you can bring all your pots together into one – that’s called consolidation. 

3. My employer isn’t around anymore so I’ve lost my pension

Whatever’s happened to your employer, your pension pot will still be out there! They will have set your pension up with a separate financial provider who you can contact directly. So you just need to:                   

• Find any pension paperwork you still have - it will tell you who your provider is and hopefully give you details like your account number
• If you don’t have those details, the Government’s free Pension Tracing Service could help  

Think you can’t get a pension? Think again!

4. I can’t get a pension because I’m self-employed 

There’s nothing to stop self-employed people getting a pension. You’re probably already paying National Insurance towards your State Pension. You can also:

• Take out a personal pension and enjoy 25% government tax relief
• Set up a workplace pension for yourself if you work through a limited company 

5. I can’t pay into a pension if I’m on maternity/paternity leave

• If you’re on maternity or paternity leave and being paid by your employer, your and your employers’ contributions will still go into your pension pot 

Pension saving on a budget 

6. I can’t afford to put a lot in, so it’s not worth it

Even if you’re not able to contribute much to your pension right now, starting early still puts you in a stronger position later on. It means you begin building your pot gradually, take advantage of employer contributions if you're eligible, and able to receive valuable tax relief on what you do save. Establishing the habit early also makes it easier to increase your contributions over time as your income grows. The earlier you start, the more time you give yourself to prepare for a comfortable retirement—even if you're starting small.

7. I’m not earning enough to get a pension

• Only workers earning £10,000 a year or more get automatically enrolled into workplace pensions. But you can ask your employer to enrol you if you’re earning less, and usually stop and start paying into it whenever you want to.
• Whether you’re self-employed and have a personal pension or saving your workplace pension, there’s no minimum amount you can pay into it – and again you can stop and start paying whenever suits you. 

8. Why am I even worrying? The State Pension will sort me out…

• Just now, the most you can get from your State Pension is about £12,547 a year. If you haven’t paid National Insurance for the full 35 years you’ll get less. That might not give you your ideal later lifestyle, so it’s always a good idea to have other pensions too. 
• If you’re not sure how much your ideal retirement lifestyle could cost, visit the Retirement Living Standards website. It’ll help you work out your later life budget.

9. I’d rather put my money into an ISA or save for a house

• Then go for it – having a mix of savings and investment options is a great idea! But be sure to keep saving for the long term. We wouldn’t recommend switching your pension payments into shorter term, possibly less reliable ways of saving. 
• A little research and forward planning can make a big difference here. Make sure you understand how each investment works, any risks involved, what sort of return you might get and if it’ll help you hit your savings goals. 

10. I’ll lose the money by the time I retire

• Putting your money away for the long-term by investing in things like stocks and shares has tended to perform better than money held in cash savings accounts. With cash savings you also have the risk of inflation, which means that the money you put away at the beginning hasn't grown enough to keep up with everything costing more. Investment growth can help with this, and don't forget about the magic of compounding!
• Any money you put into your pension is yours and will be waiting for you later on. Of course, its value could go down as well as up over the time you invest. 

Your bonus retirement goals myth

11. That’s all so depressing! I’ll be working until I’m 70, 80 or 90 at this rate! What can I do?!?

• If you’re worried about that, then all the more reason to start saving now. The longer you’re saving for, the more you can invest and the more time you give your pension pot to get to where it needs to be. Even saving just a little now can make a big difference later on.
• You don’t have to wait until you’re 70 plus to access workplace or personal pensions – from April 2028 on, you can access them once you turn 57 (it’s 55 plus until 2028). That could help you stop working or at least work less at a younger age.
• Assuming you’ve paid enough National Insurance, you’ll start getting your State Pension once you reach your late 60s. At the moment it kicks in when you’re 66, but that’s going up to 67 in 2028.

Are pensions worth it? 

That’s why we always say yes. Pensions are always worth considering.