We help customers
review all pension
providers including
Personal Pension
A personal pension is one that you organize yourself. It is in addition to the State pension you should receive as a result of amassing the required amount of national insurance contributions. Any pension advice or pension review will inevitably conclude that personal pensions are a good idea for everyone to start. Pension advisors will often maintain the State pension is not usually enough for people to maintain the standard of living they want when they retire. At present, the maximum State Pension that a person can receive is £175.20.
Once you have found a pension provider that offers a personal pension you want to sign up to, your contributions will be invested in funds and other assets to help grow your pension pot. Doing so makes your money work for you and means you should have more in your pension pot by retirement day than you originally invested.
Book Appointment Now
Most UK taxpayers can take out 25% of their pension pot tax-free. Importantly, that amount does not go towards a person’s personal allowance.
Once you have found a pension provider that offers a personal pension you want to sign up to, your contributions will be invested in funds and other assets to help grow your pension pot. Doing so makes your money work for you and means you should have more in your pension pot by retirement day than you originally invested.
There are a number of different personal pensions that currently exist. There is a stakeholder pension and a SIPP, which stands for Self Invested Personal Pension. Choosing the right one for you can be helpful do on the back of personalised pension advice or a pension review.
Stakeholder pensions are a form of pension plan that have been around since 2001. They allow pension holders to make low contributions which make them attractive to those on low or middle incomes. There are other requirements that stakeholder pensions must meet in accordance with the standards the Government set which were agreed upon after a sector-wide pension review.
More specifically, those requirements are free transfers and set management charges. Having a free transfer means that a pension holder can move their pension pot from provider to provider without incurring hefty withdrawal fees or penalties. Set management charges are currently at 1-1.5% per annum for the first 10 years of a pension plan’s life. The Government set these fees in an effort to ensure that low and middle-income earners’ pension pots were not eaten away by high management fees in years where investments performed badly.
SIPPs were designed to be the most flexible form of pension that a person could have. More traditional pension plans only allow plan holders to invest their money in a certain amount or type of fund. However, a SIPP allows a plan holder to invest their cash in many different types of asset class - from the more usual stocks and bonds to commercial property like car parks.
They were initially aimed at individuals that had acute stock market and investment knowledge, but now they are used by a wide range of people who want to invest in a wide range of asset classes to see their pension pot grow. The onus, with this type of pension plan, is on the pension plan holder to make all investment decisions. The plan holder can initially decide between different types of SIPPs that give them access to different services run by the pension plan provider. In reality, that means that the lower cost SIPPs tend to have less support provided to the pension plan holder by the provider. The more expensive SIPPs, with higher fees, tend to have more support on hand to help the plan holder make and implement investment decisions. Such SIPPs may even provide pension advice.
We’re here to help you
Contact our friendly client services team, who can assist you in finding the right financial adviser for your pension advice needs.
Speak to them on
Group Pension
A group pension is most commonly set up by a company for its employees. They are sometimes known as workplace pensions and laws have changed recently surrounding them. Now, after another Government pension review, it is a legal requirement for employers to offer employees above the age of 22 and earning more than £10,000 access to a workplace pension scheme. The employer is required to pay 3% on top of an employee’s salary into that employee’s pension. That employee then has to pay 4% of their wages into the same plan, which then attracts a further 1% in tax relief. That tax relief means the money that would have otherwise gone to the government, instead goes to the employee’s pension pot. In total, it means an individual is putting 8% of their earnings into a pension, which over the years will really add up.
These schemes are now known as auto-enrolment pensions and they were designed to ensure that everyone in the UK, who is working, is strongly encouraged to have a pension plan. While it is possible to opt out of such schemes, they are actually a form of pay rise given that a person is given an extra 3% on top of their earnings to put towards their retirement. It is for this reason that most pension advice would advocate paying into one. Auto-enrolment is worked out on an individual’s qualifying earnings which currently stand between £6,240 and £50,000. That means that companies are not legally required to pay 3% on earnings outside this bracket.
Some employers will choose to add more to a person’s pension as an added benefit to their employees. They do so at a cost to them, with the hope of improving employee retention. Some employers may even provide access to pension advice or a pension review too as part of a group pension scheme.
Review your pension from the comfort of your own home
Unlike most other pension review companies our advisers can review your pension over video call.
A traditional financial or pension review meeting brought into the 21st century.
- Face to face meeting.
- Free pension Review
- No covid risk
- Quick and easy to do.
- Reduced travel time and costs. The oldest recognised benefit of video conferencing is reduced travel time and expenses. Meaning lower fees.
- Structured meetings with improved communications
- Better for the environment.
Defined Contribution
A defined contribution plan is a type of pension. It can be either a personal or workplace pension - though a defined contribution is more likely to be the latter. Simply put it is when an employee puts a certain amount of their earnings into a pension pot. As a result, the amount that a defined contribution pension plan holder receives in retirement is the sum of their contributions and how much their contributions have grown (or decreased) over the years. It is for this reason that most pension advice will encourage starting any defined contribution schemes as early as possible. The results will be far more pleasing at every pension review a person has as a result.
When it comes to making a withdrawal from a pension scheme like this, there are a number of different ways that a holder can choose to do so. Each of them have slightly different ramifications on the tax implications as a result. For, a holder can withdraw the entire amount, part of the pension pot over a period of time, or buy an annuity with the proceeds.
If a person decides to take the entire amount, they will not pay tax on the first 25% of the withdrawal, but the rest is taxed at that person’s income tax bracket. Some people, for that reason, choose to take the 25% tax free lump sum and use the rest to buy an annuity instead thus providing them with a regular income.
It is possible to have more than one defined contribution pension plan - which is becoming increasingly more common as people move from company to company more frequently in the modern-day. It is possible to amalgamate them into one pot, though some people decide against this owing to the fees charged when transferring pension pots from some providers. In some cases, however, consolidating them in one place is a worthwhile task. Seeking pension advice and a thorough pension review can help an individual come to the right conclusion for them in these instances.
Book your FREEConsultation
The Pension Improver is rated Excellent
What our Clients Say
Defined Benefit/Final Salary
Defined benefit pension plans or final salary pension schemes are increasingly rare these days. Any pension review will conclude that they are one of the best pension plans a person can have as they ultimately provide you with a regular income once you retire for the entirety of your life. They are highly prized pensions as they take out the complexity and uncertainty of pension planning for many people when they seek pension advice. Plus, they are often very good value too - many people leave their employment once they have met the minimum requirements set by their employer, earning their final salary once they have retired.
In this way, they are a form of a workplace pension. How much a person does actually receive in retirement depends on the individual rules of a company’s defined benefit scheme. This is therefore in stark contrast to a defined contribution scheme, where you will only ever have the amount your pension pot has grown to over the years. With a defined benefit or final salary pension scheme, what you receive will vary usually in accordance with how long you have worked at a company and what you earned whilst working there. When it comes to retirement day, the pension plan provider pays out an agreed amount on a monthly or annual basis. A regular pension review will help you ensure that that amount is what you will require when you retire.
Defined benefit pension plans are also sometimes known as career average schemes. In these instances, what you receive in retirement is based on the average of what you earned at a company over the lifespan of your employment with them. It can be beneficial to make use of any pension advice available when offered a career average scheme as they can be complicated to calculate on your own for your future budgeting purposes.
Other benefits include the fact that many of these final salary schemes are hedged against inflation. Otherwise known as index-linked, it means that the value of your income stays in line with the cost of goods each year. As a result, you do not lose money through inflationary pressures on prices. Additionally, many providers will give you your pension if you are forced into retirement early. Certain conditions obviously have to be met for this to occur, but if you have to stop working due to becoming ill, you will often be given your pension.
Defined benefit pension holders can sometimes also choose to retire early without ill health being a driving factor. However, doing so will often mean you reduce your projected pension amount. Also, such plans often stop plan holders from doing so before they reach 55. Finally, if you have a final salary pension scheme, your spouse may still receive your retirement payments if you pass away before your retirement age. Such treatment can also be extended to partners or offspring. Again a pension advisor providing solid pension advice will be able to help you make the most of any pension you have if you or your family find yourself in this position.
Like other pension plans, however, you can also withdraw 25% tax-free from your defined benefit final salary scheme. When it comes to these schemes though, owing to how they are structured, calculating what that 25% is can be tricky. In these instances, it is best to talk with your pension plan provider during any pension review so that they can work out exactly for you what your lump-free sum would be.
We can conduct secure online and telephone pension reviews, providing the same excellent service as meeting your pension adviser face to face.
We help customers review all pension providers including all the below
