pension
PEN-shun
/ˈpenʃn/
A regular payment made during a person's retirement from an investment fund to which that person or their employer has contributed.
A pension is a long-term retirement plan. It differs from a '401k' (in the US) because a traditional pension guarantees a certain amount for life.
The story behind the word. Like 'stipend,' 'pension' comes from the Latin 'pendere' (to weigh). It originally referred to a regular 'weighing out' of money. In the 16th century, it began to specifically mean a payment made to someone no longer working.
Word relationships
- retirement fund: Retirement fund is the pot of money; pension is the actual payment you receive from it.
Commonly confused with
- stipend: A stipend is for students/interns; a pension is for the elderly/retired.
Word family
- pensioner (noun): A person who receives a pension.
- pensionable (adjective): Entitling a person to a pension.
Collocations
- state pension
- private pension
- pension fund
- pension scheme
Example sentences
- "He has a pension of a hundred pounds a year." A classic literary reference to retirement income.
- "The government announced a rise in the state pension age to sixty-seven." A modern news headline about government policy.
Memory hook
PEN-sion: You use a PEN to sign your retirement papers. Pay for the finish line.
When not to use
Don't use 'pension' for the money you save yourself in a regular bank account; it must come from a specific retirement fund.
Fun facts
- The first modern state pension system was introduced by Otto von Bismarck in Germany in 1889.
- In some languages, like French, 'pension' can also mean a boarding house where you pay for a room.
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