EyeOnKey terms A–Z
Quick definitions in plain English. Meanings and rules can vary by country and provider.
- 401(k) / IRA
- Common US retirement account types with tax benefits.
- Annual allowance
- The most you can add to pensions each year before extra tax applies in some countries.
- Annuity
- A product that converts a pension pot into a guaranteed regular income.
- Auto-enrolment
- A system where employees are placed into a workplace pension automatically.
- Defined benefit (DB)
- A pension that pays a set income, often based on salary and years of service.
- Defined contribution (DC)
- A pension pot that depends on what is paid in and how investments perform.
- Drawdown
- Taking money from your pension pot while the rest stays invested.
- Employer contribution
- Money your employer pays into your pension.
- Fees and charges
- Costs that reduce your pension pot, usually shown as a yearly percentage.
- Pension
- Long-term savings built up to provide income in later life.
- Pension pot
- The total value of your pension savings.
- Personal pension
- A pension you set up yourself with a provider.
- Retirement age
- The age you plan to stop working or can start accessing a pension.
- State pension
- A government payment based on your national insurance or social security record. Rules vary by country.
- Superannuation
- The Australian retirement saving system, where employers pay into a fund.
- Tax relief
- Government help that boosts pension contributions, often by reducing tax.
- Workplace pension
- A pension arranged through an employer, usually with contributions from you and them.
The common building blocks
Most countries offer some mix of a state or public pension, workplace retirement schemes, and personal retirement accounts. Workplace schemes usually involve contributions from both employee and employer; personal accounts are funded directly. The details — contribution limits, tax treatment, access ages — are set locally and change over time.
The common thread is tax advantage in exchange for locking money away: contributions or growth are taxed more lightly than ordinary savings, but the money generally cannot be reached until a defined age. That trade is the core design of every retirement system.
Why starting early matters so much
Retirement saving is the longest runway most people ever give compound growth. Money saved in a person's twenties can have several more decades of growth than the same amount saved in their fifties, which is why small early contributions often beat large late ones.
Employer matching, where it exists, amplifies this: a contribution matched by an employer earns an immediate return before any investment growth at all. Leaving a match unused is declining part of a pay package.
How retirement money is invested
Retirement accounts typically hold pooled investments whose risk level can often be chosen. Longer horizons usually suit higher-growth, higher-volatility choices; shorter horizons usually suit steadier ones. Most schemes offer a default fund designed around this idea for people who make no active choice.
Fees are the quiet variable: a percentage difference in annual charges, compounded over decades, can outweigh many performance differences. Fee disclosure is required in most markets, and comparing total expense figures between options is one of the few reliably useful comparisons in investing.
What this page cannot tell you
Pension rules — tax relief, contribution caps, access ages, inheritance treatment — are national law and change frequently. Any figure quoted generally would be wrong somewhere within a year or two of being written.
The reliable sources are the official pension regulator or tax authority where you live, and the provider documents for your own accounts. The pension contribution calculator can illustrate how different contribution levels and growth assumptions shape a pot, whatever the local rules are.