Your Home – August 2019

16 August 2019 http://www.yourhomemagazine.co.uk

I

f you’ve yet to start putting into a

pension, now’s the time to consider

all the options. As well as the

State Pension, which we all receive if

we’ve been paying at least 30 years

of National Insurance contributions,

there’s also a wide choice of personal

schemes including stakeholder and

workplace pensions.

Start saving for your

retirement by taking out a

pension scheme designed

to make later life easier

Feature

Hayley Gilbert

Image

iStock

n You make regular payments into a pension

fund and this is then invested in stocks and

shares to give you an income when you retire.

n Ask your employer if their scheme is a

personal or occupational pension plan.

The benefits from each are different.

n If choosing your own personal pension,

compare products from different providers

using a comparison website or the Money

Advice Service.

n Ask for the ‘key facts document’ for each

pension plan you are considering – this

summarises all the important points.

n Check that you can comfortably afford the

contributions each month, as there may be a

minimum payment.

n Ask if you have to commit to regular

payments or if you can vary how much and

when you’ll pay.

n Check what charges you need to pay too

• these can include administration fees, transfer
  charges, costs for managing your investments
  and any penalties if you miss a payment or take
  your pension early. These are deducted from
  your fund and will affect the amount of
  pension you receive.

These are another type of personal

pension that need to meet certain

conditions set by the government.

l Can be a great option for those who need

something more flexible, as they enable you

to vary the amount you pay as well as when

you make the payments. They also have

capped charges and charge-free transfers.

l Stakeholder pensions tend to offer a

smaller range of funds and investment

options than personal pensions and the

value of investments can go up or down.

l Some employers will offer these.

Q

What are pension scams?

Marianne Baxter, Chippenham

A

When the new rules came out in April

2015 allowing you to take some or

all of your pension as a lump sum, scams

became more common. These are fake

investments designed to con you out of your

money. Visit http://www.pensionwise.gov.uk for

tips on how to avoid them. If anyone calls

you out of the blue to discuss your pension,

it’s likely to be a scam so hang up.

Your employer must now enroll you into

their workplace pension if you are eligible:

3 It’s called automatic enrolment and you are

entitled to join within two months of starting

work. Ask personnel or

the HR department

for information.

3 You are eligible

if you aren’t

already in a

workplace

pension, are

aged 22 or

over, are under

State Pension

age, earn more

than £10,000 a year

and work in the UK.

3 Contributions are taken

directly out of your wages and your employer

will also have to make contributions.

3 Occupational schemes offer final salary

(increasing as your salary rises) or money

purchase schemes (based on the amount paid

in and how the investments have performed).

3 You can opt out but it’s worth doing as you

also get tax relief on your contributions.

WORKPLACE PENSIONS

l The Pensions Advisory Service is an

independent organisation that offers

free information and advice at

http://www.pensionsadvisory

service.org.uk.

l Compare different pension plans

and work out how much you’ll need

at http://www.moneyadviceservice.

org.uk.

l Visit http://www.gov.uk for information

on the basic State Pension.

Useful contacts

STAKEHOLDER

PENSIONS

PERSONAL PENSIONS

Provided through banks, building societies, insurance companies or where you work:

WHEN YOU’RE

SELF EMPLOYED

You won’t be covered by automatic

enrolment so it’s important to make

sure you plan ahead for the future:

n Saving into a pension is a tax-efficient

way of making provision for your

retirement income.

n As well as the usual personal and

stakeholder pensions, there are also

self-invested personal pensions

(SIPPs), small self-administered

schemes (SSAS) and Master Trusts.

top tip

Before making a

decision, it’s best to get

advice from an independent

financial advisor. You can

find one at http://www.fca.org.uk.

Never sign anything until

you fully understand

the T&Cs.