Starting a Pension - what you need to consider...
It is never too late to start a pension, but the earlier you start the more chance you will have of a better retirement and a healthier pension income.
Think of it this way, for every £100 you contribute to your pension and assuming 7% growth per annum, that £100 will nearly double in value every 10 years (ie; be worth £196).
We don’t advise relying on the state pension alone as this is unlikely to provide you with sufficient income in retirement.
If you are lucky enough to be a member of your employer’s scheme then make sure you check if the projected income in retirement is sufficient to meet your aspirations. It is now possible to also contribute to an approved Personal Pension as well as your employer’s scheme. The government encourages you to save for your retirement by giving you tax relief on pension contributions. Tax relief reduces your tax bill or increases your pension fund.
Not a member of an occupational scheme? If this is you then there is no time like the present to start contributing to your own pension scheme. Contributions can start from as little as £20 per month, although a higher sum is likely to be needed to provide a good income in retirement. We can help with advice on pensions covering a wide range of products
There are several different types of approved personal pensions (stakeholder pension, personal pension and self invested personal pension). Stakeholder pensions have their charging structure capped by the government, so they are generally cheap to run, but don’t normally offer as wide a range of funds to invest in. Personal Pensions tend to have access to a wider range of funds, but their charging structure may be higher than the stakeholder option.
Self invested personal pensions (SIPPs) generally have access to the widest range of funds, and can also include for example direct shares, investment trusts, ETF’s(exchange traded funds),warrants,gilts and commercial property. Due to the higher number of allowable investments, SIPP charges tend to be higher than other types of Personal Pension, but for the right type of investor a SIPP can offer potentially higher returns.
There are many providers to chose from as well, so always seek professional advice before starting a pension. See our further service pages for information on moving a pension or unlocking a pension.
We can help with advice on buying Annuities in the UK or if you are in poor health an Impaired Annuity
