RPSM02400020 - Employer pages: Registering a pension scheme with HMRC: what is a pension scheme? Meaning of "pension scheme"

Meaning of "pension scheme"

This manual relates to financial vehicles of a certain type, which Parliament has agreed to apply special tax treatment to, so as to encourage saving to provide individuals with earnings replacement later in life. In the legislation containing the special tax treatment, these vehicles are referred to as "pension schemes".

A pension scheme is defined in the legislation as a scheme or other arrangement that provides benefits to a person/in respect of a person in any of the following circumstances

• retirement
• death
• having reached a particular age
• serious ill-health or incapacity, or
• similar circumstances.

A "pension scheme" does not have to provide benefits in all of these situations. For example, if it provided benefits on death in service only, it would still fall within the definition of a "pension scheme".