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    Pensions explained

    Pensions are just long-term, tax-efficient saving for later life. Here is the shape of it.

    By the Happy Wallets team·Updated June 2026·5 min read

    The main types

    • State Pension: paid by the government based on your National Insurance record.
    • Workplace pension: you and your employer contribute, often with tax relief.
    • Personal pension or SIPP: one you set up yourself.

    Why they are powerful

    Contributions usually get tax relief and the pot grows largely tax-free, so money invested early has decades to compound. Employer contributions are effectively free money.

    Frequently asked questions

    How much should I pay in?+
    More is generally better, and capturing the full employer match first is a strong move. This is guidance, not advice — a regulated adviser can tailor it.
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