Pension?
- why put it off apply online today 'Why do today, what can be put off until tomorrow?'.
Not quite how the proverb puts it, but a more realistic assessment
of how many lead their lives these days? With work deadlines,
family commitments etc planning ahead can seem like a luxury!
Perhaps planning for your retirement can seem like one of
those things that can be put off for a while but it's certainly
true that the earlier you start a pension the easier it will
be to accrue sufficient funds to enjoy your retirement free
of financial worries. Obviously the later in life you leave
it to start a pension or start contributing a meaningful sum
into a pension, the greater the proportion of your earnings
you will need to invest later in life to 'catch up' on any
potential shortfall. It's stating the obvious to point out
that people who are 60, 70, 80, whatever age, still have demands
on their purse from those necessary evils (bills) to like-to-haves
(holidays). In the twilight of your life, do you really want
to be worried about making ends meet?
Sorting a pension or a means of financial well-being in retirement
is an action that needs taking now if you have no other plans
in place. Use the comparison service to discover more about
the Stakeholder Pension plans available in the UK and find
out how you can obtain professional advice about what is right
for you based on your individual circumstances.
Stakeholder pensions became available from 6th April 2001
and were introduced by the Government to ensure a simple,
low charge product was available that offered the following
features:
Charges are limited to a maximum of 1% of the value of your
pension fund each year, albeit pension providers can recover
other costs and charges they have to pay for e.g. stamp duty
or other charges for buying and selling investments for your
fund.
As little as £20 can be contributed weekly, monthly
or at irregular intervals.
Funds can be transferred to another stakeholder pension without
incurring any penalties.
Stakeholder pensions are appropriate for:
The self employed.
Those in employment but not having a pension.
Those not working but still receiving an income e.g. investment
income, annuities, state benefits, lottery winnings or an
inheritance.
A spouse, children, grandchildren and parents.
Note that as with any other pension scheme, you cannot draw
on any money invested in your pension fund until you reach
retirement age.
Contributions are payable net of tax. Even non-taxpayers
contributing to a stakeholder pension, benefit from the tax
relief offered by Inland Revenue.
If you are taxed at the basic income tax of 22%, then every
£100 that goes into your pension fund only costs you
£78 (based on the 2001/02 tax year tables).
If you are taxed at the higher rate of 40%, then every £100
that goes into your pension fund only costs you £60
(based on the 2001/02 tax year tables).
Contributions can be increased, decreased, stopped and started
without incurring any penalties whatsoever.
Should your employer provide access to a Stakeholder Pension
scheme, you can request your employer to deduct your contributions
direct from your pay. If you are paying your contributions
through your employer you can change your contribution amount,
but only every six months.
As in any personal pension, you are entitled to withdraw
25% of the fund tax free when you reach retirement age. The
balance must be used to provide you with retirement income,
either by buying an annuity or drawing income from your fund
(income draw-down).
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