Personal Pension Plan

What is a Personal Pension Plan?

Personal Pensions are very similar to Stakeholder Pensions. They do not have to adhere to the same rules on charges, access and terms, but they offer the same kinds of benefits with a wider range of investment options. They are investment plans designed to help you invest for your retirement.

A Personal Pension belongs to you and thus gives you control. The funds within a Personal Pension may be invested in various funds such as cash, gilts, corporate bonds, equities (stock market) and property. If you are looking for a Pension plan that has an even wider range of investment options see Self Invested Pension Plans.

When you retire, the plan will provide you with a pension. You can choose, at retirement, whether to have a pension, or a tax free cash sum of up to 25% and a reduced pension (other options are also available – see Options at Retirement).

Amongst other things, the pension you receive will depend on how much you have paid in, how your investments perform and annuity rates at the time you take your benefits.

How much can you contribute?

You may contribute, and will normally receive tax relief on, an amount not exceeding 100% of your UK taxable earnings (or 3600 if your earnings are less than this). Different Pension providers will have different minimum payments but in general the minimum regular payment is 100 and the minimum one-off payments will be 1,000.

You can usually increase or reduce the amount you pay at any time, without paying a penalty fee. If you want to stop paying altogether (for example, if you’ve left work to raise a family), you can usually stop and restart your payments whenever you like.

Which funds can I invest in?

This will depend on which provider you select to administer your Personal Pension. Different Pension providers will have a different range of funds available.

What are the charges?

Charges will again vary depending on which provider you select to administer your Personal Pension. They are taken to pay for the cost of setting up the plan, advice provided, fund management and policy administration.

Before setting up such a policy we will provide you with full guidance and advice along with personalised illustrations which will detail the charges involved.

What if you have an existing pension?

Throughout your working life you may have built up benefits in several company pension schemes or private pension of your own. If so, you may carry on paying into your private pension as well as taking out a personal pension plan. In some cases, you may be able to move the money that you've built up in other pension schemes into a lower cost Personal Pension plan.

Bear in mind that some pension schemes offer extremely attractive benefits upon retirement and thus transferring such pensions will not be in your interest.

If you would like us to look into your pension plans and provide you with advice on what benefits you may receive upon retirement and whether transferring to another provider would be benificial, please contact us.


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