Creating A Better Financial Future 

Personal Pensions 

Personal Pensions Scheme (including Stakeholder schemes) 

These are also Money Purchase schemes and are open to everyone and especially useful if you are self-employed, your employer doesn’t yet run a company scheme or just for topping up existing arrangements.  
 
From October 2012, the Government introduced reforms and all employers have to offer their employees, who meet certain criteria, automatic enrolment into a workplace pension. Employers can use the Government backed scheme, National Employment Savings Trust (NEST), or offer an alternative ‘Qualifying’ work place pension scheme such as a Group Personal Pension, providing it ‘ticks’ certain boxes. The process has been phased in since 2012 depending on the number of employees in the firm. Employers are required to contribute a minimum of 2% and the employee contributing 3% from April 2018. This will then increase to 3% of salary from the employer with Employees making a personal contribution of 4% with tax relief of 1% added on top from 6th April 2019. 

Retirement Options 

There are now a vast array of different products that may be used at retirement to provide benefits from the traditional form of annuity that provides a regular income stream to Flexi-access Drawdown which enables lump sums of benefits to be taken either as a one-off payment or over a given number of years. Given the complexity and choice all individuals now have, it is important to seek independent financial advice before making any decisions. 

State Pensions 

State Pensions may not produce the same level of income that you will have been accustomed to whilst working. It’s important to start thinking early about how best to build up an additional retirement fund. You’re never too young to start a pension – the longer you leave it the more you will have to pay in to build up a decent fund in later life. 

Personal and Stakeholder Pensions Personal Pensions represent a popular and attractive way of saving for your retirement. 

The Government has laid down a set of conditions for stakeholder pensions to make them more accessible and to limit the amount of charges that you have to pay. They work in a similar manner to a personal pension plan. 
 
Stakeholder pensions (SHPs) are individual contracts between you, the member, and the pension provider. The pension provider is often an insurance company or an investment platform, although there are also a number of other providers, including banks and building societies. 
You can hold a stakeholder pension if you’re employed, self-employed or not working. If you’re employed, your employer can contribute to your stakeholder pension. 
 
Other people are also able to contribute, and you can also contribute to other people’s stakeholder pensions. For example, you could contribute to your spouse’s or partner’s SHP or even to a child’s SHP to allow them to start building up retirement benefits from an early age. 
 
Since 2006, there has been no restriction on the number of different pension schemes that you can belong to, although there are limits on the total amounts that can be contributed across all schemes each year if you are to receive tax relief on contributions. This means you can have a stakeholder pension to provide additional retirement benefits, even if you're a member of a workplace pension scheme. 
 
Stakeholder pensions are similar to personal pensions but have their charges capped at 1.5% for the first 10 years reducing to 1% thereafter. Whilst Stakeholders are generally considered a little cheaper than Personal Pensions, investment choices may be restricted. 
 
Personal pensions are a type of defined contribution pension scheme. They are individual contracts between you and the pension provider and are set up by you, the member. The pension provider is often an insurance company, although there are also a number of independent providers. You can have a personal pension if you're employed, self-employed or not working. If you’re employed, your employer can also contribute to your personal pension. 
 
Other people are also able to contribute, and you can contribute to other people’s personal pensions. For example, you could contribute to your spouse’s or partner’s personal pension, or even to a child’s personal pension to allow them to start building up retirement benefits from an early age. 
 
There are no restrictions on the number of different pension schemes that you can belong to, although there are limits on the total amounts that can be contributed across all schemes each year, if you're to receive tax relief on contributions. 
 
This means you can have a personal pension to provide additional retirement benefits, even if you’re a member of a workplace pension scheme. Most personal pensions are flexible and portable. If you change jobs, or stop working, you can normally continue contributing to a scheme. 
 
You will be eligible to take 25% of your accumulated fund tax-free when you retire, the earliest age being from 55. There are a range of options when you decide to take benefits such as purchasing annuity or electing capped or flexible drawdown. 
The value of pensions and investments can fall as well as rise and you may get back less than you invested.  
Your attention is drawn to pension scammers who will try to convince individuals to transfer their funds into unregulated plans or unsuitable investments.  
For both transfers and retirement options, we recommend you visit The Pension Regulator's websites: www.pensionwise.gov.uk and the Money and Pensions Service (MAPs) www.maps.org.uk for free and impartial information to help you understand your retirement options and make the right decision. 
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