1Do I need a personal pension?
You need your own pension because the state allowances paid by the government aren't that generous and often result in a significant drop in income.
The flat rate state pension for a single person is £159.55 a week. However, the amount you will actually receive is dependent on your National Insurance record. Some people could get more and others could get less.
With a private pension you can help cover the shortfall, and ultimately aim to improve or at the least maintain your quality of living in retirement.
2What fund will my pension be invested in?
As financial advisers we manage several portfolios of funds, with options for every budget. Before setting the policy up for you we will provide you with our recommendations, including a fund selection. Our portfolios are made up of UK and global equities, to diversify your investments and spread the risk.
3What happens when I die?
When you die, any unused pension pots normally fall outside of your estate for Inheritance Tax purposes and can be passed on to any nominated beneficiary. The Income Tax rules for accessing it are set out below:
- If you die age 75 or over:
When the money is taken out (lump sum or income) it will be added to the beneficiary’s income and taxed at the appropriate Income Tax rate(s).
- If you die before age 75:
Your pension pot will pass tax-free to your nominated beneficiary provided the money is paid within two years of notifying the provider of your death. If it is paid after two years, the money will be added to the beneficiary's other income and taxed at the appropriate rate.
4How many pensions can I have?
You can have as many personal pensions as you like provided that added together all your payments do not exceed your annual or lifetime limits.
Contributions to a workplace pension can only be made whilst you are an employee. You could actually have many different former ones operating at the same time that you are no longer making payments / contributions to, but they may still be invested and hopefully growing for you. (This would be if you had left previous jobs and not transferred your occupational pension fund).
We often help clients by consolidating these individual pensions into a single pension pot, for easier management, but every pension is different.