There are two main types of pension in the UK: the state pension and private pensions. Here's how they differ and why you might need both.
The state pension
The state pension is paid by the government to eligible people when they reach state pension age.
Key facts:
State pension age is currently 66, rising to 67 between 2026 and 2028, and expected to rise further in the future
To receive the full state pension, you need 35 qualifying years of National Insurance contributions
You can check your state pension forecast on the government website (gov.uk)
Limitations:
The state pension provides a basic income, but for most people it won't be enough to maintain their current lifestyle in retirement. That's where private pensions come in.
Private pensions
Private pensions are retirement savings you build yourself, either through a workplace pension or a personal pension like a SIPP. Your Chest pension is a private pension.
Key facts:
You build your own pot through contributions
You receive tax relief on contributions (the government adds 20-45%)
You can access your private pension from age 55 (rising to 57 from April 2028)
You have more control over how much you save and how it's invested
How they work together
The state pension and private pensions aren't either/or – most people will have both. Think of the state pension as a foundation, and your private pension as the extra layer that allows you to live the retirement you want.
Why private pensions matter
Relying solely on the state pension could mean a significant drop in your income when you retire. If you're used to earning a reasonable salary, the state pension alone is unlikely to cover your living costs, let alone holidays, hobbies, or helping family.
A private pension lets you save more, benefit from tax relief, and build a pot that's yours to control.
Can I have both?
Yes. You'll still receive your state pension (if eligible) regardless of how much you have in private pensions. Building a private pension is about giving yourself options and financial security on top of the state provision.
Still need help?
If you have questions about pensions, contact us at hello@joinchest.com.