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What Would You like to Know?
What is a Personal Pension?
A personal pension plan is a tax efficient savings plan designed
to provide a regular income in retirement.
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How does my money grow?
Your contributions will be invested in one or any number of funds
with the company recommended. In time the value of your fund should
increase until you are ready to receive your benefits, at which
point you will use the accumulated fund to generate an income.
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What are the tax advantages of a Pension?
One of the great advantages that Personal Pension Plans have over
other types of investment, is the considerable tax concessions that
your contributions and investment funds receive.
Firstly, your contributions receive tax relief based on the highest
rate of tax you pay. Secondly, where the money is invested, it grows
free of Capital Gains Tax. No other UK investments offer these advantages.
You can also protect your contributions against inflation, by having
them increase year on year, or build in an option called waiver
of premium, where the Insurance Company will waive your contributions
if you are unable to work due to ill health.
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How much should I pay in to a Pension?
According to a study carried out in 2001 by the Association of Consulting
Actuaries, workers starting a pension at age 25 need to invest a
minimum of 10% of their income if they want to retire with just
under 2/3rds of their final wage to live on. However, those wishing
to retire early or are starting later need to invest much more.
The ACA recommends that those starting a pension at the age of
35 need to invest between 15% to 20% of their salary while those
starting at age 45 need to ensure that up to 30% is invested.
The Financial Services Authority and the Association of British
Insurers have devised an online
calculator aimed at giving the public an idea of how much their
pension is going to be worth in the future.
Simply click here
and fill in the form with details such as your age, pension contributions
and when you want to retire.
The calculator will then estimate for you how much of a monthly
pension you can expect when you finally give up work.
However, it is important to remember that the calculator will only
give you a rough estimate at what you may get back upon retirement.
(Money Minder is not responsible for the content
of external internet sites)
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What about Stakeholder Pensions?
From April 2001, as part of the restructuring of Welfare Reform,
the Government introduced fundamental changes to the structure of
UK pensions provision.
The Government’s broad objectives are that:
- “Those who are able, should save what they can for their
retirement.”
- “The Government should support those who cannot save and
regulate the pension system effectively.”
- “The private sector should provide affordable and secure
second pensions.”
*(source: “Partnership in Pensions”
Green Paper December 1998)
Stakeholder Pensions are simple, low cost pensions, designed to
encourage more people to provide for their retirement.
- For a more detailed look at Stakeholder pensions,
- If you are an employer, and want to know what you should consider
CLICK
HERE
- If you are an individual and want to know more about these schemes
CLICK
HERE
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When can I start to draw an income?
Under current legislation, the benefits may be taken at any time
between the ages of 50 and 75, unless you are in a job where it
is customary for you to retire early, and you have agreement from
the Inland Revenue.
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What options are available at retirement?
There are a number of different options available when you come
to draw your pension. They include: -
- A level pension for life
- A reduced pension, with a tax free lump sum
- An escalating pension
- A widow/ers benefit can be provided for
- A number of other options are also available which can be discussed
in more detail when you retire
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What options should I consider if I am retiring
soon?
You should take a more detailed look at the options available by
CLICKING HERE
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What should I do next if I want to invest in
a Pension Plan?
If you would like to look further into investing into a Personal
Pension plan, you can email us at info@money-minder.com
or call us FREE on 0800 197 88 88 between 9am and
5pm Monday to Friday when we will be happy to discuss your requirements.
We are able to offer a full advice service and recommend the most
suitable Pension for your circumstances.
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