Pensions are designed to provide a tax efficient way of saving
for your retirement. Whether it’s a new plan you require or a
review of any existing retirement provisions we can help.
Plans have evolved over time and some companies may have
merged or no longer be trading or actively looking after your
interests: this can all too often lead to poor investment growth,
high charges and restricted policy options.
Older plans may be in need of a makeover, encompassing
a review of investment strategy, charges, flexibility and ongoing service.
There are many different Providers with varying types of pensions and options for
you to choose from. The team at M3 can fully explain your options, find the right pension
policy and if required monitor your ongoing investment to ensure that it remains the most suitable for you.
Stakeholder Pensions
for your retirement. Whether it’s a new plan you require or a
review of any existing retirement provisions we can help.
Plans have evolved over time and some companies may have
merged or no longer be trading or actively looking after your
interests: this can all too often lead to poor investment growth,
high charges and restricted policy options.
Older plans may be in need of a makeover, encompassing
a review of investment strategy, charges, flexibility and ongoing service.
There are many different Providers with varying types of pensions and options for
you to choose from. The team at M3 can fully explain your options, find the right pension
policy and if required monitor your ongoing investment to ensure that it remains the most suitable for you.
Stakeholder Pensions
- A type of personal pension that has to meet certain standards set by government. You can take one out yourself or it may be available through your employer.
- A pension policy you take out yourself from an insurance company or financial institution and into which you pay contributions.
They generally provide a greater investment choice and more flexibility than a Stakeholder pension.
- A type of pension designed to allow a greater amount of investment flexibility,
including commerical property purchase.
- A type of personal pension offered by some employers but not classified as occupational.
- Only available through employers and run by pension scheme trustees.
There are two
types – salary-related (defined benefit) and money purchase (defined contribution).
- Some occupational pensions and all personal, group personal, stakeholder, Free Standing Additional Voluntary Contributions (FSAVCs) and some Additional Voluntary Contributions (AVCs) are money purchase pensions. Your contributions are invested in, for example, the stock market and the size of your fund depends on your contributions and how well your investments do. You buy a lifetime annuity with your pension fund to provide you with retirement income.
- A lifetime annuity will give you a regular income for the rest of your life. You buy an annuity with the fund you have built up in a money purchase pension fund. There are different types of annuity to suit your needs and circumstances.
- You do not have to buy a lifetime annuity from your pension provider. You can shop around to compare rates and arrangements offered by other insurance companies and buy an annuity from another provider if you find a better deal – this is called the open-market option.
- HM Revenue and Customs limits how much you can take as a tax-free lump sum from your personal or stakeholder pension fund – currently up to a quarter (25%) of your fund. For occupational pensions it depends on the rules of the scheme.
- A way of taking an income from your pension fund up to age 75, while leaving the rest of your fund invested, but this involves some risk to your pension fund. There are two types of unsecured pension – short-term annuity and income withdrawal.
- The part of your pension fund which was used to contract out of the State Second Pension (SERPS or S2P) that must be used to buy a protected rights annuity.
- The Pension Service (part of the Department for Work and Pensions) will pay your basic State Pension based on your National Insurance contribution record. You may also qualify for the additional State Second Pension based on your earnings and National Insurance contributions.
- The State Second Pension is an additional State pension paid on top of your basic State Pension. This was called SERPS. Self-employed people cannot build up a State Second Pension.