Personal Pensions

What is a personal pension?

A personal pension is a kind of pension that you buy from a pension provider such as a bank, life assurance company or building society. It is entirely your own, which means you can continue to contribute to it if you move jobs.
It is a good idea to consider a personal pension if you:

  • cannot, or do not want to, pay into an occupational pension scheme
  • are self-employed
  • are not working but can afford to pay for a pension

Personal pensions are money purchase schemes (also called defined-contribution or DC schemes). As with occupational money purchase schemes, the money you save is put into investments for you, such as bonds or stocks and shares. When you retire, this fund will be used to buy an annuity from an insurance company that will give you a regular income.

What are the benefits of a personal pension?

There are several advantages to contributing to a personal pension scheme:

  • You get tax relief on your contributions up to HM Revenue & Customs limits. This broadly means that (using the basic tax rates for 2009/2010) for every 80 you pay into a personal pension, the Government adds an extra 20. And the more you save the more you get in tax relief
  • You can choose to take a tax-free lump sum of up to 25% of your total pension when you retire
  • You may be able to choose the funds you invest in
  • Other people can pay into a personal pension on your behalf. This means that partners or other family members can help you save for your retirement
You don’t need to be working to save in a personal pension scheme

Contact us for more information.
27 West High Street
Tel: 01764 652 225
Fax: 01764 654 433

Disclaimer - No investment decision

No investment decision should be taken based on the content of this site.  Always take full individual advice first.  The regulations governing tax rates and investments may change in the future.

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