Protection for your pension

How your pension is protected depends on the type of scheme.

Defined contribution pension schemes

If your employer goes bust

Defined contribution pensions are usually run by pension providers, not employers. You won’t lose your pension pot if your employer goes bust.

If your pension provider goes bust

If the pension provider was authorised by the Financial Conduct Authority and can’t pay you, you can get compensation from the Financial Services Compensation Scheme (FSCS).

Trust-based schemes

Some defined contribution schemes are run by a trust appointed by the employer. These are called ‘trust-based schemes’.

You’ll still get your pension if your employer goes out of business. But you might not get as much because the scheme’s running costs will be paid by members’ pension pots instead of the employer.

Defined benefit pension schemes

Your employer is responsible for making sure there’s enough money in a defined benefit pension to pay each member the promised amount.

Your employer can’t touch the money in your pension if they’re in financial trouble.

You’re usually protected by the Pension Protection Fund if your employer goes bust and can’t pay your pension.

The Pension Protection Fund usually pays:

  • 100% compensation if you’ve reached the scheme’s pension age
  • 90% compensation if you’re below the scheme’s pension age

Fraud, theft or bad management

If there’s a shortfall in your company’s pension fund because of fraud or theft, you may be eligible for compensation from the Fraud Compensation Fund.

Contact one of the following organisations if you want to make a complaint about the way your workplace pension scheme is run: