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It
goes without saying that we should all have provision
in place for our retirement, but choosing the most
appropriate method can leave us with a real headache.
There is a plethora of different pension schemes available,
so if you don't have access to a company pension scheme,
you can choose to make provision independently through
a personal arrangement. We can provide you with a
completely unbiased and independent service to help
you make your decision in a more informed way.
Funding your retirement
The Inland Revenue limits the amount you can pay into
a personal pension in any one year. This is calculated
as a percentage of your annual net relevant earnings
(subject to the earning cap). If you are an employee,
your net relevant earnings is your earned income,
while if you are self-employed this is normally your
profits less business expenses. As you get older (and
therefore nearer to retirement), the percentage increases.
Anyone under the age of 75 may contribute up to £3,600
per annum into a personal pension plan without evidence
of earnings, providing they do not transgress the
concurrency rules.
A
bigger pension
If you are a member of an occupational pension scheme
and want to top up your pension, an Additional Voluntary
Contributions plan (AVC) could be the solution for
you. This is particularly useful if you're not getting
the maximum benefit from your company scheme because
you've only recently started working there. Alternatively,
and if appropriate, you could take out a Free-Standing
Additional Voluntary Contributions plan (FSAVC) offered
by an independent provider.
Under the concurrency rules, even if you are a member
of an occupational pension scheme you may still be
able to contribute to a Stakeholder scheme as a top-up
to a company pension, provided you meet certain criteria.
Investment choice
If you require greater flexibility when it comes to
deciding when and where your money is invested, then
a Self-Invested Personal Pension (SIPP) could be the
answer. SIPPs are very much like a flexible personal
pension but with special investment facilities. They
offer access to a wide range of investments in addition
to the collective funds available to personal pensions
and stakeholder schemes. The choice includes individual
equities and bonds, traded endowment policies, warrants
and convertibles. You could also invest in commercial
property, including new business premises for your
firm, hotels, motels, nursing homes, guesthouses and
pubs.
Company directors
Executive Personal Pensions (EPPs) can be appropriate
for company directors. They are run under occupational
pension rules and normally enable the investor to
build up a bigger pension fund than would be possible
through a personal pension.
SSAS schemes
Small Self-Administered Pension Schemes (SSASs) are
related to EPPs. They are also run under occupational
pension scheme rules, with a maximum of 11 members
allowed to be a part of the scheme. Like a SIPP, a
SSAS can invest in a wide range of assets.
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