# Personal Pensions

> How personal and self-invested personal pensions (SIPPs) work, the tax relief and annual allowance, and when you can access your money.

Canonical page: [/investing-pensions/personal-pensions](/investing-pensions/personal-pensions/) · Last reviewed: 2026-08-22

A personal pension is one you set up yourself, rather than through an employer — useful if you are self-employed or want to save more for retirement. Contributions are invested and boosted by tax relief.

## Key information

- You choose the provider and pay in yourself, with tax relief added
- The annual allowance is £60,000 for most people in 2026/27
- The invested pot can rise and fall in value — capital is at risk
- You can normally access it from age 55 (rising to 57 in April 2028)

## What a personal pension is

A personal pension is a defined contribution pension you arrange directly with a provider. You pay in, the money is invested, and the size of your eventual pot depends on how much goes in, how the investments perform, and the charges deducted. A self-invested personal pension (SIPP) is a type that gives you a wider choice of investments to manage yourself.

Because the money is invested, [the value can go down as well as up](/investing-pensions/investment-risk), and there is no guaranteed amount at the end. Charges vary between providers and reduce your returns over time, so they are worth comparing.

## Tax relief and the annual allowance

The Government adds tax relief to personal pension contributions, which is a significant boost to your saving. For the 2026/27 tax year, the annual allowance — the most you can normally pay into all your pensions each year while still getting tax relief — is £60,000, or 100% of your earnings if lower.

High earners may have a lower, "tapered" allowance if their income is above set thresholds (adjusted income over £260,000), and a reduced money purchase annual allowance of £10,000 applies once you have flexibly accessed a defined contribution pension. Because these rules are complex, check your position or take regulated advice before making large contributions.

## When you can take your money

You can normally start taking money from a personal pension from age 55. This minimum age is due to rise to 57 from 6 April 2028. You can usually take up to 25% of the pot as a tax-free lump sum, with the rest taxed as income when you draw it.

How you take an income — for example through drawdown or by buying an annuity — is an important decision with lasting consequences. The Government’s free Pension Wise service offers guidance to over-50s, and regulated advice can help you choose what suits you. Our [guide to pension drawdown and annuities](/investing-pensions/pension-drawdown-and-annuities) explains the main options.

## Your rights

- Personal pension providers must be authorised by the FCA — check the firm on the FCA Register before you invest.
- Over-50s with a defined contribution pension are entitled to free, impartial guidance from Pension Wise (part of MoneyHelper).
- You can complain to your provider and escalate free of charge to the Financial Ombudsman Service if a problem is not resolved.

## Official sources

- [GOV.UK — personal pensions](https://www.gov.uk/personal-pensions-your-rights)
- [Check a firm or adviser on the FCA Register](https://register.fca.org.uk)

## Related

- [Pension Drawdown & Annuities](/investing-pensions/pension-drawdown-and-annuities/)
- [State Pension](/investing-pensions/state-pension/)
- [Workplace Pensions](/investing-pensions/workplace-pensions/)
- [Pension Consolidation](/investing-pensions/pension-consolidation/)
- [Investment Risk](/investing-pensions/investment-risk/)
- [Checking a Financial Firm](/investing-pensions/checking-a-financial-firm/)

## Sources

- GOV.UK — [Tax on your private pension contributions — annual allowance](https://www.gov.uk/tax-on-your-private-pension/annual-allowance) (accessed 2026-08-22)
- MoneyHelper — [Personal pensions](https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/personal-pensions) (accessed 2026-08-22)