When we retire, most of us rely on our pensions. In simple terms, a pension is a regular income that is paid to a person after they have retired, but it can also refer to the plan or scheme that is set up in order to provide this income and other retirement benefits. But where do pensions come from and how are they regulated? We’ve read up on pensions so that you can get the ball rolling on your own financial planning for the future.

Pension fund: A pension fund is the umbrella term to describe the assets built up in a pension plan. This can be shaped in a number of ways, including through your employer or by way of private pensions. The investment built up through the years is used at retirement to purchase a pension annuity.

Pension annuity: Also known as a compulsory purchase annuity, a pension annuity is the expression for an insurance policy that pays your income during retirement. As explained above, your pension fund is what pays for this insurance policy.

Pensionable earnings: Your pension benefits and contributions are calculated on earnings, also known as pensionable earnings.

Pensionable service: These pensionable earnings are calculated from your pensionable service, the period of time you have spent with a company.

Pension transfers: As there are numerous ways to have a pension (as seen above in “pension fund”) it is likely that at some point you may need to transfer the value of one pension plan scheme to another. This is done by reassigning the value directly from one employer/pension provider to another approved scheme.

Pensioneer trustee: If you have your pension with a small self-administered scheme, it must have an independent and professionally recognised trustee to oversee processes.

Pensions Ombudsman: Those who are members of occupational and personal pension schemes can make disputes and complaints to the Pensions Ombudsman. Their role is to investigate these claims, as well as investigating the complaints between trustees and employers, and between trustees.