| Private Pension Scheme UK Introductions - Pensions have become a much talked about subject in recent years and plenty written about them has not been good. Changes in the tax laws and poor returns from equities as well the myriad problems stemming from company schemes have left many people completely disillusioned with this form of investment, often investors have turned to the more lucrative buy to let market as a way of investing and saving for the future. At one time the government had planned to allow investors to place buy to let properties within a SIPP (self investment pension plan). They then decided to change their mind and now the only property that is allowed within in a SIPP is Commercial Property. With, property prices are now at an all time high in Britain, interest rates are creeping up and this now may spark a return to pension investments with the offer of �Free Money� What ever your views on pensions as an investments, one thing is for sure, the state pension will not provide you with an adequate amount of money for your retirement unless of course you have particularly low expectations. With advances in modern medicine, we are living longer and as a consequence, we will need more and more money to keep us through our retirement years. An informal chat with our life & pensions and department will be able to point out the various options that are open to you as well as the various investments that you may like to consider as part of your financial planning. The information printed on this page is of a general nature and does not constitute advice. Private Pensions - These are pensions that are arranged privately by you either directly with the pension provider or via a Financial Advisor. The basic idea is simple you, pay the insurance company a sum of money each month which they will invest along with tax relief reclaimed from the government. This money is then invested for a period of years until you reach your chosen retirement age (subject to the minimum retirement age in force at the time). The sum of money that has accumulated can then be paid in a number of ways. Firstly, you are free to take a cash free lump sum (usually 25% of your pension pot). The rest is used to purchase an annuity from an insurance company which will provide you with an income for the rest of your life. The income from the annuity is subject to taxation in full as earned income. If you wish to obtain an idea as to how much annuities return, their yields are usually published in the money sections of the quality press. You do not need to buy your annuity from your pension provider, if you can obtain a better rate of return elsewhere, you can do so. In simple terms an annuity is a contract between an individual and an insurance company whereby the insurer in return for a lump sum of money, guarantees the purchaser an income for the rest of his or her life. And there are various types available and a chat with a financial advisor will be able to explain your options to you. Company Pension Scheme - Company pension schemes are becoming less and less popular, firstly they have received unbelievably bad press in recent years for the way in which they have been run and secondly, hardly anyone entering employment these days expects to devout all of their employment years to the same employer. Under a company pension plan, your employer would normally deduct monies from your salary each month to pay in to the pension scheme. When you retire, you may receive an annual amount based on a percentage of your last annual salary or based on the amount of money you have built up in to the fund. In some cases the money you have accumulated is transferable to another employer�s fund, but this is becoming more difficult as company pension plans become fewer and fewer. If you leave a company to which you have been paying in money and your new employer does not have a scheme, you may be able to freeze the payments or transfer the money to a personal pension plan subject to charges being made. If you wish you can normally make additional voluntary contributions to your employer�s scheme if you are able to save more money. These contributions are normally made as lump sums. Transfers of funds from company pension plans should never be undertaken lightly, many people feel that they have received inappropriate advise on these matters in recent years, particularly as occupational pension schemes offer a number of benefits (such as death in service) that are not available under the private pension plan, Always seek professional advise relating to any pension transfer before you make any decision. As well as the above, part of the money deducted from your wages each month as national insurance is paid in to the state run pension scheme or SERPS, These payments top up your state pension albeit in a very modest way. Many people have contracted pout of SERPS preferring for an insurance company to receive the funds and invest the money on their behalf. Recently the trend has reversed and many people are opting back in to the SERP scheme. Again this is an area as to contracting in or out needs to be discussed with an independent financial advisor so as you can receive the correct advice to suit your personal circumstances. When considering your pension arrangements please remember the following. 1. We are living longer, more people wish to receive a benefit from the state run pension scheme, it is highly unlikely that it will provide for comfortable retirement. 2. The transfer or termination of a pension or pension payments is a serious business, as well as discussing the matter with the scheme representative; professional opinion should always be taken before any changes are made. back to top | 
