Paul Crichton

Paul Crichton


At MMG Chartered Accountants, we firmly believe retirement should be a golden period marked by peace, enjoyment, and above all, financial security. Achieving this comfort hinges on gaining clarity about the various pension schemes available and making informed, strategic investments in them. Today, we aim to illuminate the landscape of these diverse pension schemes, unravelling their complexities and highlighting the unique advantages they each bring to your retirement planning.

Defined Benefit (DB) Pension Schemes

Typically offered by employers, DB schemes provide a pre-determined retirement income, usually calculated based on your salary and years of service. The most significant advantage of DB schemes is the certainty they offer; regardless of market conditions, your retirement income is guaranteed. However, such schemes are becoming less common due to their high maintenance costs.

Defined Contribution (DC) Pension Schemes

In DC schemes, the retirement income depends on the amount you and/or your employer contribute and the returns on these investments. The risk in these schemes lies in investment performance; poor returns can lead to a smaller pension pot. On the other hand, robust investment performance can result in a larger retirement fund.

State Pension

The state pension is a regular payment from the government that you can claim when you reach State Pension age. In Scotland, the state pension age is currently 66 but is set to rise to 67 between 2026 and 2028. The amount you get depends on your National Insurance contributions throughout your working life.

Personal or Private Pensions

These are pension schemes that you arrange yourself, independent of your employer or the state. They offer flexibility as you can choose how much you want to contribute and how to invest your pension pot. Moreover, they can supplement other pension income, particularly beneficial if your state or employer pension is not sufficient.

Hybrid Pension Schemes

Hybrid schemes are a mix of DB and DC schemes, providing some certainty of income like DB schemes, but also potential for growth through investments like DC schemes. They offer a middle ground but can be complex to manage.

Now, why are pension schemes beneficial?

  • Income Security in Retirement: Pension schemes provide a steady stream of income in retirement, allowing you to maintain your lifestyle without the regular pay cheque.


  • Tax Benefits: Contributions to most pension schemes are eligible for tax relief, making them an effective way of saving for the future.


  • Compound Interest: The sooner you start contributing to a pension scheme, the longer your money has to grow. This is the magic of compound interest – your pension pot grows exponentially over time.


  • Employer Contributions: Many employers match or exceed your contributions to workplace pension schemes, effectively giving you ‘free money’ towards your retirement.

As we draw this discussion to a close, let’s underscore the value of expert guidance in navigating the maze of pension schemes. That’s where we, at MMG Chartered Accountants, along with our trusted partner, Verus Wealth, step in.

Our partnership with Verus Wealth merges our accounting know-how with their wealth management skills, equipping us to deliver personalised solutions for your retirement planning. Together, we’re prepared to help you make sense of your financial standing, articulate your retirement ambitions, and carefully select the right pension schemes to bring those ambitions to life.

Thinking about a secure future? The time to act is now. Reach out to MMG Chartered Accountants and Verus Wealth to kickstart your journey to a secure, worry-free retirement. Our combined strengths pave the way for you to take full advantage of two industry veterans devoted to safeguarding your financial future. Take the first step today for the reassurance you’ll appreciate in the years to come.