Personal Pensions

A personal pension is a way of making regular savings for your retirement. You get them from pension providers, eg insurance companies and banks, who then invest your funds.

When you retire you use the fund you have built up to buy a regular pension income for the rest of your life. This is can be through buying an annuity or by drawing your income from the accumulated fund. In most cases you can get part of the pension fund as a tax-free lump sum of 25% of the fund value.

You will receive this pension as well as any State Pension you have built up.

Should I have a personal pension?
Before you take out a personal pension plan, you should think about all the options open to you.

You should consider a personal pension if you either do not have access to an occupational pension or if your company pension scheme doesn't suit your personal needs.

You can also use a personal pension to top up the pension provision from any other pensions you might have.

How much will I need to contribute?
The amount of money you will need to contribute will depend on the level of income you want to have in retirement and how old you are when you start contributing.

You may be surprised with how little you can start with. In most cases, you will be able to build up your contributions as you can afford to pay more.

You should remember, though, that there can be no guaranteed rate of return.