Investment Jargon: Defined Contribution (DC) Pension

Defined Contribution (DC) Pension

A pension where you and/or your employer pay in a set amount, which is invested to build up a pot over time. What you get at retirement depends entirely on how much was paid in, how long it was invested, and how the investments performed, so the investment risk sits with you rather than your employer. Most modern workplace and personal pensions, including SIPPs, are defined contribution.