The stereotypical view of a financier or accountant is that they're, well boring. Not renowned for being the most excitable of characters someone that sits and organises other people's financial and tax payments for their living is, although essential and much appreciated, not the most exciting of industries to be in. With a struggling and under-performing economy though gone are the days where we can dump our receipts and banking information on our accountant's desk to take care of it for us, the need to take more financial responsibility is now unavoidable. We need to be aware of and plan not only for the present, but our financial future too in the form of personal pensions.
Finance and pensions are a confusing market to try and navigate your way around unaided, it's always highly advised therefore to speak to a professional prior to signing any investment agreement. With their certification and working knowledge of the pensions market and various schemes they can ensure you make the choice that is right for you and your family in terms of what you are able to pay, your lifestyle, your desired lifestyle when you retire and your income. They can also decipher the often complex and - let's be frank - boring terms and conditions surrounding each scheme so that you don't have to!
To delve into what their purpose is a little, personal pension schemes or plans are paid into primarily to provide an income stream for retirement; they can also provide death benefits too. One of the main benefits of them is that the individuals paying into them get tax relief, unlike a lot of other schemes out there. Both employers and individuals can pay into these schemes and they have to be taken between the ages of 50 and 75 although like with most things there are probably exceptions to this rule!
So, how are personal pensions divided into their various subtypes? The three main umbrellas which most schemes fall under are insured personal pensions, self invested personal pensions and stakeholder pensions. To begin with insured personal pensions these can be contributed to by both employer and individual. Individuals can choose from a number of options so although insured personal pensions are more restricted in a sense, there are still plenty out there to suit people's needs for which these are the most suitable choice. Again it pays to be aware of the surrounding conditions so speaking to an advisor is essential.
The main difference between insured personal pensions and our next type of pension - self invested personal pensions (SIPPs) - is that SIPPs allow the individual to make their own investment decisions within the plan, potentially giving them more freedom although they are still government approved. Lastly stakeholder pensions have been introduced in recent years. These target lower earners and allow those with a lesser income to secure a stress free retirement too with their terms and conditions mostly relating to lower payment options for the contributor.
Looking towards the future and securing the funds for our retirement has never been more important with bad news concerning the economy seeming to be at every turn. Just ensure that you speak to a professional and get their opinion on the best option for your situation before you sign any scheme agreements!
Finance and pensions are a confusing market to try and navigate your way around unaided, it's always highly advised therefore to speak to a professional prior to signing any investment agreement. With their certification and working knowledge of the pensions market and various schemes they can ensure you make the choice that is right for you and your family in terms of what you are able to pay, your lifestyle, your desired lifestyle when you retire and your income. They can also decipher the often complex and - let's be frank - boring terms and conditions surrounding each scheme so that you don't have to!
To delve into what their purpose is a little, personal pension schemes or plans are paid into primarily to provide an income stream for retirement; they can also provide death benefits too. One of the main benefits of them is that the individuals paying into them get tax relief, unlike a lot of other schemes out there. Both employers and individuals can pay into these schemes and they have to be taken between the ages of 50 and 75 although like with most things there are probably exceptions to this rule!
So, how are personal pensions divided into their various subtypes? The three main umbrellas which most schemes fall under are insured personal pensions, self invested personal pensions and stakeholder pensions. To begin with insured personal pensions these can be contributed to by both employer and individual. Individuals can choose from a number of options so although insured personal pensions are more restricted in a sense, there are still plenty out there to suit people's needs for which these are the most suitable choice. Again it pays to be aware of the surrounding conditions so speaking to an advisor is essential.
The main difference between insured personal pensions and our next type of pension - self invested personal pensions (SIPPs) - is that SIPPs allow the individual to make their own investment decisions within the plan, potentially giving them more freedom although they are still government approved. Lastly stakeholder pensions have been introduced in recent years. These target lower earners and allow those with a lesser income to secure a stress free retirement too with their terms and conditions mostly relating to lower payment options for the contributor.
Looking towards the future and securing the funds for our retirement has never been more important with bad news concerning the economy seeming to be at every turn. Just ensure that you speak to a professional and get their opinion on the best option for your situation before you sign any scheme agreements!
About the Author:
An expert in pensions, FPP offer quality planning advice around the country. Located in Crowthorne, Berkshire they offer advice on a multitude of financial services.
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