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Information
on Personal Pension
Personal Pension also named as
private pension provided by pension companies intended to give you
a second pension to help you have a secure retirement. Personal
Pension is an arrangement within a UK personal pension scheme in
which the scheme member has the power to direct how the
contributions are invested. At it helps to a conventional personal
pension to exercise power over the type and range of investments
bought; especially having the power to purchase commercial
property either directly or with a mortgage.
Different Pension Plans:
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Basic state retirement pension
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Additional pension
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Occupational pension
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Personal pension
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Stakeholder pension.
Self-invested Personal Pensions
Self-invested Personal Pensions is a
pension plan that holds investments until you retire and start to
draw a pension income. Most Self-invested Personal Pensions plans
allow investment in a range of assets including commercial
property. Self-invested Personal Pensions are designed for people
who want to manage their own fund by dealing with, and switching,
their investments when they choose. They may have higher charges
than other personal pensions or stakeholder pensions. As with any
pension fund, you cannot take money from the fund until age 50.
Tax and Personal Pensions
What the amount you contribute to
your pension plan scheme, the pension provider claims tax back
from the government at the basic rate of 22%. This means that for
every £78 you pay into your pension plan scheme, you end up
with £100 in your pension pot.
How much can I pay into a pension?
In personal pensions you can pay up
to £3,600 each year as until if you have no earnings.
But if you have earnings you can
invest higher amounts as it is up to a set percentage of your
earnings. The percentage starts at 17.5% for those aged fewer than
36 and increases with age. There is also an upper limit, know as
the earnings cap, on the earnings that can be taken in to account
for pension contributions.
Options Available On Retirement
At the time of retirement you have
many choices to take decisions such as
You can withdraw all capital in your
pension fund in cash.
Take a ‘tax free’ lump sum
and invest the balance in an annuity.
Take a ‘tax free’ lump sum
and invest the balance in an “approved minimum retirement
fund” or in an “approved retirement fund”.
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Personal Pension 
