A defined contribution pension is where a worker agrees to pay a set amount into their defined contribution pension scheme, for example 5 per cent of their earnings they make.

Once  the set amount has been decided and agreed their employer will then match this, so there for 10 per cent of their total earnings goes into their pension each month.

Where is the money invested ? Well the money is invested in stock market funds and the pot will grow over the years.

When the employee comes to retirement they must take their pot and buy an income with it or draw on it for one.

If you have anymore questions on a defined contribution pension or you already have one and wish to seek independent financial advice, we at Hutt Professional have financial advisers with many years of experience who would be more than happy to offer you independent financial advice. If you are located in Leamington Spa or surrounding areas and wish to seek Independent pension advice do not hesitate to contact us.