Private Pension Plans

Introduction:

What are Private Pensions?

“Private pension” is a broad definition which covers both workplace pensions arranged by your employer and personal pensions which you set up yourself. Private pensions provide a way for you to save for retirement, so that you’ll have an income to supplement the amount you’ll receive from the state pension.

How do private pensions work?

Private pensions are defined contributions plans, where any payments you make are invested. The amount you end up with at retirement depends not only on how much you’ve paid in, but also on how your investments have performed and the level of charges you have been paying. A defined contribution pension is one of the most common types of private pension around.

Having a private pension – Key Takeaways

Perhaps the most crucial idea to remember – regardless of the type of private pension you have – is that you at least have one. Starting early when it comes to pension planning is the number one piece of advice that any financial adviser will tell you. However, it is never too late to start saving for your pension and there are so many types of private pensions out there that there will be one that works best for your circumstances. Making use of a pension calculator can be prudent, but also seeking pension advice can be one of the best things you can do to help you plan for your future.

The world of pensions can be a complicated place. Yet, pensions are something that affects us all, so it is necessary to understand your pension wealth as best as possible. If you are ever in any doubt about what to do about your pension and retirement, seek pension advice from a professional. It has been shown that people who seek pension advice are better off in retirement than those that do not, so it really does pay to talk through your finances with an expert.

How do we do it?

With our more modernized plans, we strive on giving our clients some of the best pension plans out there, either you add monthly to your pension plan or you make a one-time payment, let your pension grow for you, our plans are giving the opportunity to have your pension grow until you are ready to spend it. With modernized payment plans that you set up to your desires and needs, we will make our effort to help you find the one that suits you.

PLANS

Self-Invested Personal Pensions (SIPP)

Self-invested personal pensions or SIPPs are a form of personal pension that are highly flexible in where money can be invested. Traditional pensions limit the funds your provider can invest in. But with a SIPP you can invest in pretty much anything that our Company has to offer, overseas properties, but mainly regulated assets. These investments typically grow at a consistent pace, at higher rates than traditional pension funds. So, investors are hoping for a higher rate of return.

There are low-cost SIPPs and full SIPPs. A low-cost SIPP means you can invest an amount as low as just a few thousand dollars. While low-cost SIPPs may not provide many added extras like mobile trading apps to run your investments, they will usually have lower charges too. A full SIPP will usually provide you with a large range of investments that can even include real estate. If your investments are more complex, having a full SIPP should mean you have a team at your provider to help you implement them. However, having a full SIPP account requires a larger investment, but the benefits are greater. 

The range of assets that a SIPP can hold are:

Unit trusts

Shares

Investment trusts

Gilts/bonds

Cash

ETFs (Exchange Traded Funds)

Crypto

Property

You may want to start a SIPP with your own savings or with money from other pensions. If it’s from your own savings you can do so by simply opening it with one large lump sum. For transfers from other pension plans, you will be starting a SIPP with a large lump sum. However, before doing so, ensure that you are aware of the charges surrounding the transfer. Many pension plans have substantial withdrawal fees that act as a penalty. Moving your pensions into one place may not be financially the best decision, therefore, a SIPP, owing to the huge flexibility of the product, can vary in large amounts. To make the best decision please refer to your personal advisor (account manager) for the plans available, this way you can find the right one that suits you the best.

Personal Pensions

A personal pension is a defined contribution. You can control how much you’re investing in. You balance the level of risk and security, for growth. And now, after the age of 55, (57 if born after 1971) you get to decide how you want to take the money. They are a good option if you do not have a workplace pension and you are looking for a risk-free pension plan.

Personal pensions offer two main benefits. Firstly, and obviously, they allow you to save more money for your retirement and be a bit more optimistic about your financial plans. Secondly, you gain some tax relief in doing so.

The pension plan you choose will claim back that tax relief and simply direct it back into your pension pot. We do this at the basic rate of tax to begin with, though if you are a higher rate taxpayer, you then need to claim the higher amount back on your tax return. Secondly, it is you who chooses where your money is invested in terms of funds that are offered by the Company – and not your employer.

Once you have chosen your pension plan, they work like a defined contribution pension – you decide how much you put in so that you build your pension pot up by adding to it, as well as growth from investments made. Over time, it could be that you amass many defined contribution pensions. This is increasingly more common as moving jobs regularly over the lifespan of a career is the norm these days. For that reason, it is good practice to keep a record of all your defined pension schemes so that you can stay on top of your retirement planning, and by having a plan here with us, will make keeping track much easier. So, all being said please refer to your Financial Advisor (account manager) for more details and plans available.