Why a pension plan can be like a present to your future self – and your loved ones

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It doesn’t come with bows or sit under a tree. But if you have a pension plan, you could say it’s a bit like a present for your future self and the ones you love – especially if you keep an eye on it and check you’re on track. Here’s why.

1. You can get a helping hand

Pension plans come with a lot of benefits that could potentially add up over time and really help you in future. 

If your employer set up your pension plan, they usually pay into it – not just you.

And if you’re under 75, you usually get tax benefits when you pay into a pension plan. These can work in different ways. But essentially, you can get a hand from the government. Learn more on MoneyHelper.

Finally, money paid into a pension plan is invested, giving it the potential to grow over time. You might even see growth on top of growth. Just keep in mind the value of investments can go down as well as up and could be worth less than was paid in. 

2. It can provide for you and your loved ones during your lifetime

The whole point of a pension plan is to support you and your loved ones at a time in your life when you’re likely not working or have reduced work commitments. So the earlier you start paying attention to it, the better. You can check the Retirement Living Standards, from Pensions UK, to see what your costs in retirement might look like at a ‘minimum’, ‘moderate’ or ‘comfortable’ standard of living. 

You can use our pension calculator to see if you might be on track for the lifestyle you want.

From age 55, rising to 57 from 6 April 2028, you can start taking your pension savings.

If they can afford it, some people use a bit of their pension income as a ‘gift’ to their loved ones. For instance, they might give grandchildren money to help them out at university. Do familiarise yourself with rules around gifting, as it can have Inheritance Tax (IHT) implications. MoneyHelper’s guide is a good place to start. It could be worth speaking to a financial adviser – find out more about getting financial advice.

3. It can provide for loved ones after your death

Pension plans aren’t normally covered by your Will, but you can usually nominate the people you want your pension savings to go to when you die. These are your ‘beneficiaries’. Although your provider isn’t bound by your wishes, they’ll take them into account.

You can normally nominate your beneficiaries online or through your pension provider’s app. Or you may need to request a physical form from your provider. You can find out more about Standard Life’s online services on our website, or visit our support page for FAQs and ways to get in touch. 

Relationships can change, so keep your beneficiary information up to date on your pension plans.

How – and whether – your pension savings are paid out when you die depends on your circumstances. Find out more information on MoneyHelper.

Currently, pension savings you haven’t taken, and death benefits, aren’t considered part of your ‘estate’, so they’re not subject to IHT. But the government have announced their intention to include unused pension savings when calculating the value of estates from April 2027, meaning they could be subject to IHT. The full details of how this will work are still to be confirmed by the government.

4. You can pay into someone else’s pension

You might have the option to pay into someone else’s pension plan, or vice-versa. This is known as making ‘third-party payments’. You might pay into a loved one’s plan if you’re working but they’re taking a career break and aren’t paying in, for example. This could make a positive difference to their future. It’s a bit like giving someone else a present that they can open further down the line! 

Whether you can do this depends on the rules of the pension plan.

If you’re paying into someone else’s plan, their tax benefits will be based on their tax situation.

Be aware of the annual allowance: the total that can be paid in across a person’s pension plans in a tax year before a tax charge could apply. Paying into someone else’s plan doesn’t impact your own annual allowance. But you’ll want to be aware of their allowance too to check you’re keeping within it. Discover how the annual allowance works.

Payments into someone else’s plan can count as a gift, so it’s worth reading up on gifting rules.

Want to make the most of your pension plan?

Paying into a Standard Life pension plan and want to make the most of it? You could consider paying in a bit more, if that’s right for you. You may be able to increase your monthly payments or make a one-off payment to your Standard Life plan online or through our app. If your employer set up the plan and you want to change your monthly payments, ask them how you can do this.

 

The information here is based on our understanding in December 2025 and shouldn’t be taken as financial advice.

A pension is an investment. Its value can go down as well as up and could be worth less than was paid in. 

Your own personal circumstances, including where you live in the UK, will have an impact on the tax you pay. Laws and tax rules may change in the future.

Standard Life accepts no responsibility for information on external websites. These are provided for general information.