About Pensions
Pensions are, of course, designed to provide you with sufficient money to live comfortably after you have retired from work. There are many different 'tools' used to save for retirement and the taxation and investment elements of pensions can appear baffling. Financial advisers specialise in explaining, recommending and monitoring pensions for their clients. There is currently a choice of four sources of pension to fund for your retirement:
• The basic state pension for people who have paid National
Insurance contributions while at work or have been credited with
contributions.
• Additional state pension - this is now the State Second Pension
(S2P). Before 6 April 2002, you built up SERPS (State Earnings
Related Pension Scheme) pension. Both are available to employees
earning more than a given amount (£84 a week currently). Many
people who are not working because they are caring for young children
or an elderly relative, or because of disability or long-term
illness are also able to build up State Second Pension. Additional state pension is not available in respect of
self-employment income.
• An occupational pension through an employer's
pension scheme - if your employer runs a pension scheme, it's
usually a good idea to join.
• A personal pension scheme (including
stakeholder schemes) open to nearly everyone and especially useful
if you are self-employed or your employer doesn't run a company
scheme
State pensions may not produce the same level of income
that you will have become accustomed to whilst working. From 6
April 2004, the state pension is only £84.25 per week (2006/7)
for a single person (though you would be able to claim means-tested
state benefits if that was your only income).
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.
Learn more on Personal and Stakeholder
Pensions
Personal and
Stakeholder Pensions
Personal Pensions represent a popular and attractive way of saving
for your retirement.
click to learn more
