Personal Pensions

Many employees prefer to set up personal, "portable" pensions of their own. Those who are self-employed also do so, of course. In this case, as with defined contribution schemes, contributions are set aside in the pension plan and used to purchase an annuity before age 75.

One of the great attractions of pension schemes as a method of saving for retirement is that there is tax relief on contributions up to government set contribution limits. There is no other investment you can make which will give you 22% or 40% tax relief, depending on the highest rate of tax you pay. Please note that levels, and bases of, and reliefs from taxation are subject to change.

Which sounds most appealing, paying tax to the government or saving it for your old age?

 

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Occupational pensions

Stakeholder pensions