Money purchase

A Money Purchase arrangement is a type of pension arrangement in the United Kingdom.

It can either be sponsored by an employer (such as a Small Self Administered Scheme, an SSAS) or an individual arrangement (such as a Self-invested personal pension, SIPP, or Personal pension, sometimes with an insurance company). With this type of arrangement a sum of money is accrued which is then used to secure an income at retirement. It is sometimes known as a Defined Contribution scheme to distinguish it from a Defined Benefit scheme where the benefits payable are linked to salary.


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