A group money purchase scheme is set up by your employer to provide you with access to a pension. You choose if you want to join the scheme. Typically, you will pay into the scheme as well as your employer. Your combined payments form your pension fund.

When you retire, you can take some of your fund as a tax free lump sum. The rest of your fund is used to provide a regular income.

Pros

• The scheme is set up by your employer.
• The administration and maintenance of the scheme is performed by trustees, all you need to do is complete a form, and they will do the rest.
• Your employer will normally make valuable payments to the scheme.
• You can take a lump sum at retirement as well as receive an income.
• You may be able to take benefits from the plan from the age of 50 if you reach this age before 6 April 2010 (the minimum age will be 55 from this date).
• Your widow, widower, civil partner or other dependant(s) can receive your pension in the event of your death or, if you die before retirement and before age 75, they can get a tax-free lump sum.

Cons

• If your employer doesn't make payments into it, then considering a personal pension plan may be a better and more flexible option.
• If you leave your employer you will need to make new arrangements for your pension, as you will not be allowed to carry on paying into this scheme.
• The investment decisions may be out of your control and made by the trustee, although for some people this can be a good thing.
• There may be set times that you can join the scheme and you may be limited to how often you can make any changes.

If your company has one of these pension schemes and your employer is paying into it as well, then this may be a good option for you. The administration is handled by the scheme trustees and your employer payments should increase the amount of income you may get when you retire.

If your employer is not paying into the pension scheme, you may want to look at some of the other pension options available as these may be more suitable for you.

Talk to your HR or Line manager, they will know if the company has a group money purchase scheme that you can join. If there is a scheme, they will be able to provide you with all the relevant information and forms.

Speak to your employer - Talk to your HR or Line manager about your company's pension arrangements to see if you have this option.

If unsure get advice - If your company has a scheme but does not make payments to it then you may be better getting a personal pension.

Even if they do make payments, once you have the details of the scheme your adviser will be able to tell you if it is a good deal or not. Some pension schemes carry relatively high charges, so getting an idea of the cost of your pension is very important.

Act sooner rather than later - There may be only certain times in the year that you can join the scheme, so if you don't act now then you could miss an opportunity.