Organising your personal finances is rarely a fun task and its tricky enough keeping track of them in the present day let alone planning what to do with them in the future. Many people working their first job or event entering into their thirties aren't even thinking about pensions yet, however with individuals living longer, an economy riddled in debt and a consistently growing population, pensions and the funding of our retirement regularly makes the headlines.
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.
Self invested personal pensions are the next subset and these schemes are defined by the freedom they offer the individual as the person paying into the scheme is ultimately responsible for their own investment decisions. The final type of scheme is the stakeholder pension. These were brought in to cater for those individuals that earn less, they are cheaper to run and offer those earning less a chance to save for and secure their future too.
With bad news concerning the economy seemingly at every turn it's never been a better time to start looking at your retirement and securing this financially. With such a myriad of options available though, speaking to a professional before undertaking a financial decision is just as vital as finding the right type of pension plan to suit your needs.
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.
Self invested personal pensions are the next subset and these schemes are defined by the freedom they offer the individual as the person paying into the scheme is ultimately responsible for their own investment decisions. The final type of scheme is the stakeholder pension. These were brought in to cater for those individuals that earn less, they are cheaper to run and offer those earning less a chance to save for and secure their future too.
With bad news concerning the economy seemingly at every turn it's never been a better time to start looking at your retirement and securing this financially. With such a myriad of options available though, speaking to a professional before undertaking a financial decision is just as vital as finding the right type of pension plan to suit your needs.
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.