A group personal pension (GPP) is one of the most common types of workplace pension in the UK private sector. It looks and feels like any other workplace pension — your employer sets it up, both you and your employer contribute, and the money is invested on your behalf. But legally, it is a personal pension that belongs to you, not your employer.
GPP vs Occupational Pension — The Key Differences
| Feature | Group Personal Pension (GPP) | Occupational Pension |
|---|---|---|
| Legal structure | Contract between employee and insurer | Trust with separate trustees |
| Who owns the scheme | You (individual contracts) | Trustees (on behalf of members) |
| Portability when leaving | Stays with you automatically | May need to transfer or defer |
| Member protection | FCA and Financial Ombudsman | TPR (The Pensions Regulator) |
| Benefit type | Usually defined contribution | Can be defined benefit or defined contribution |
| Common examples | Many private sector GPPs | NHS Pension, Teachers’ Pension, NEST |
How a GPP Works
Your employer selects an insurance company or pension provider (commonly Aviva, Legal & General, Scottish Widows, Aegon, or Standard Life) and negotiates terms for a group arrangement. Each employee then becomes a policyholder of their own individual contract within that group.
Contributions:
- Deducted from your salary each month
- Your employer adds their contribution directly to the plan
- Tax relief is applied (usually via net pay or relief at source, depending on the provider)
Investment:
- You choose from a range of funds (or stay in a default fund)
- Your pot grows based on investment performance
- At retirement, you access it like any other defined contribution pension: lump sum, drawdown, annuity, or combination
When You Leave Your Employer
One of the most practical advantages of a GPP: when you change jobs, the pension follows you seamlessly. You have three main options:
- Leave it invested — stop contributing and let the pot continue to grow with the existing provider
- Continue contributing yourself — open a personal direct debit to the same plan and keep paying in (though you lose employer contributions)
- Transfer it — move the pot to your new employer’s scheme or a personal SIPP. Transfers are usually free and straightforward for defined contribution GPPs
You do not need your old employer’s permission to transfer a GPP. Contact the provider directly.
Auto-Enrolment and GPPs
Many employers meet their auto-enrolment obligations using a GPP. The minimum contributions under auto-enrolment in 2026/27 are:
- Employee: 5% of qualifying earnings (including 20% tax relief)
- Employer: 3% of qualifying earnings
“Qualifying earnings” is based on earnings between £6,240 and £50,270 per year. Some employers use total earnings rather than qualifying earnings, which can produce higher contributions.
Worked Example
Scenario: Gemma earns £32,000 and joins her employer’s GPP. Contributions are 5% employee (including tax relief) + 5% employer on total salary.
- Employee contribution: £1,600/year gross (£1,280 net — relief at source adds £320)
- Employer contribution: £1,600/year
- Total going into Gemma’s GPP: £3,200/year
- After 20 years at a 5% growth rate: approximately £106,000
When Gemma changes jobs five years in, her £16,000 pot (at that point) goes with her. She transfers it to her new employer’s SIPP within six weeks of starting.