Pensions

Everyone is keenly aware of the central role that good pension provision plays in our lives.

Our pensions team will take you through the various options available to you, from personal pensions to family savings opportunities, explaining in plain English the advantages of various schemes.

Whether you are planning ahead, approaching retirement, already retired or an employer, we will be able to help make the most of your pension contribution and income.

Occupational Schemes

These are company pension schemes set up by employers for their employees. There are two types of scheme the first "final salary" also called "defined benefit" and the second "defined contribution" also called "money purchase" scheme.

With "final salary" schemes a Trust is set up for the members [employees]. Money is paid in by the Company [employer] , the members or both. The money is invested.

Members get the benefits on retirement typically a proportion of their final salary for each year they have been a member of the scheme. This is usually the pension value but members are often able to elect to take a reduced pension in exchange for a lump sum on retirement.

The scheme is managed by the Trustees and monitored by Actuaries who will determine whether the fund has sufficient assets to meet current and future pension payments. If the performance of the investment fund has been poor then the Company is expected to make up the shortfall. Because of the volatility of the stock markets in recent years many pension funds are "under-funded" and many employers have closed the Pension Fund to new employees or closed down the scheme completely.

"Defined Contribution" or "Money Purchase" schemes are now very common. Employers will set up a scheme and monthly contributions are put into a fund specifically for that particular employee who, when they retire is able to take a tax free lump sum to purchase an "annuity".

Annuities are sold by insurance companies and others and guarantee the policyholder an income throughout retirement.

Personal Pensions

Most frequently used by the self employed but available alos to employees who wish to set up a "portable" pension.

Contributions are invested in a pension plan which is used to purchase an annuity on retirement - however value of the fund will depend on investment performance.

One of the attractions of Personal Pensions is that there is tax relief on the contributions up to defined limits so you can get tax relief of 22% or 40% on your investment.

Stakeholder Pensions

Introduced in 2001 there are many low cost stakeholder pension offerings which enable most people, particularly those on lower incomes, to start planning for retirement. Our advice is always to start contributing as early as possible so that the fund has time to grow and make a difference to your retirement.

Contacts

For a free initial consultation please contact

Duncan Orr: Office: Seaford; Tel: 01323 892549; Email: Duncano@swindellsandgentry.co.uk
Joe Fackler: Office: Seaford; Tel: 01323 892549; Email: Joef@swindellsandgentry.co.uk