Personal Pensions

Independent financial advice

Put simply, personal pensions are pension plans arranged by individuals to save for income later in life.

Types of Personal Pension Plan

There are a few different types of plan:

  • A pension arranged independently
  • A pension set up by your employer, known as a workplace pension
  • A Stakeholder pension
  • A Self Invested Personal Pension (SIPP)



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How Personal Pension Plans Work

With all personal pensions, you pay money into your plan and this money is invested. When it comes to taking income from the pension plan, the amount of money available will depend on:

  • How much has been paid into the plan
  • How the investments have performed
  • How you decide to take income from your plan

Whilst the tax treatment will depend on your individual circumstances and tax rules, which may change in the future, you will usually receive tax relief on your payments into any personal pension. If you have a workplace pension, the tax relief is given by the contribution being made before tax is applied to your salary. You pay tax on your earnings after the pension contribution has been made. Therefore, although the contribution has been made from your pay, you receive tax relief by paying less tax.

Picking the Right Personal Pension Plan for You

It’s important you’re invested in the right type of pensions for your needs and objectives. Whilst these plans have similarities in terms of tax relief, they can have very different features when you look at the plan in more detail. For example, the fund choice could be very limited, which could restrict your investment choice. The method of income in retirement may not be available with certain plans and charges on plans can also differ quite substantially.

We will work with you to build a personal pension plan around your needs and objectives, and help you to make investment decisions based on your personal circumstances. The value of investments can go down as well as up. Through our ongoing advice service, we can help keep these plans on track, both when saving into a pension plan and later when needing to take income from that plan. speak to our chartered advisors today.

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Personal Pensions
Meet Matt Hignett, our expert in Pensions & Retirement Planning