pension-bluePersonal & Stakeholder Pensions

A Personal Pension belongs to a named individual who has personal control over the plan – including the contribution amounts. JB Wealth Management Ltd have experts available to advise on all aspects of personal pensions including the recently changed pensions regulations.

How personal pensions work

Monthly, or annual, or lump sum payments are made to a pension provider who sends annual statements of the fund value. The return at retirement depends on how much is paid in, how well the investment funds have performed, and how the retirement income is paid e.g. as a lump sum or regular payments.

Personal Pensions

Personal Pensions usually offer a range of investment options to suit a variety of preferences to investment risk and there is often flexibility to change investment choices. Money invested into a personal pension is free of capital gains tax, and the contributions are enhanced by income tax relief. For example if you invest £80 and the government adds tax relief (currently 20%) this can increase the contribution to £100. If you are a higher rate taxpayer you can claim additional relief with an annual allowance of up to £50,000*.

Until spring 2015, from age 55 (when you retire) you can take up to 25% of the fund as a tax-free
lump sum with a range of annuity options available for the remaining pot. From early 2015 thereafter there is no requirement to purchase and annuity from your retirement pot and you are not restricted to only taking 25% tax free cash, you can take the whole fund. Careful consideration is needed to understand the pros and cons of the options available and to make the best possible use of the pension fund accrued.

Stakeholder pensions

Stakeholder pensions are similar to personal pensions but have their charges capped at 1.5% for the first 10 years reducing to 1% thereafter. Stakeholder pensions are generally a little cheaper than Personal Pensions and the investment choices may be restricted.

If you need advice on an existing personal pension or stakeholder pension or you want help selecting a new scheme or provider contact JB Wealth Management Ltd specialist pension adviser.

*At 2014

Auto Enrolment

The Government has introduced a pension scheme for all employers and employees. Detail can be found on The Pensionary Advice Service .

For further information please see:

http://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics/automatic-enrolment

http://www.thepensionsregulator.gov.uk/doc-library/automatic-enrolment-detailed-guidance.aspx