Personal Pensions
“Nothing – not even prison bars – can hold a man as securely as can poverty in old age” Victor Hugo
Historically, people relied on pensions provided by the Government for their financial security in retirement. However, people are living far longer than they were 100 years ago and, as a result, the rising cost of providing pensions has meant that Government pensions are being curtailed.
Thankfully, the changes to the laws surrounding pensions in recent years has dramatically increased the flexibility offered by individual pension arrangements and, as a result, more and more people are using Personal Pensions to build financial security in retirement. In recognition of the importance of making provision for retirement, pension arrangements benefit from a number of tax advantages including tax relief on personal contributions and being able to withdraw up to 25% of the fund as a tax-free lump sum at retirement.
The important thing is to make sure that you invest in the right arrangement for you as individual plans fall in to 3 categories.
Stakeholder
Generally a smaller range of funds into which to invest, but a Government-imposed “cap” on the charges that may be included within the plan.
Personal Pensions
With no “cap” on charges there tends to be a much wider range of funds into which to invest. However, Personal Pensions can compete with Stakeholder plans when it comes to costs.
Self Invested Personal Pensions
Offer the widest range of investment options – including property, shares and “collectives” such as Unit Trusts. These plans are often used by business owners to purchase the property from which the business operates. Arrangements such as these should only be used where the size of the investment can justify the cost.
It is never too late to start investing towards retirement – and never have individual pensions offered investors such flexibility and so many options as they do today!
Complete Mortgages Ltd is not authorised to give investment advice. The information contained in the page has been provided by Ashcourt Rowan Group. Please fill out our online enquiry form and we will arrange for them to call you.
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