Pension Options

What are my pension options?

There are several different pension options that you can take, but one of the most important things is to take a pension option.

The pension options that people usually assume will look after them when they retire is the state pension. The state pension is a government paid state pension to everyone who has made a certain number of years of national insurance contributions, paid after state pension age until you die.

The state pension is currently just under £100 a week per person, although is less when taken as a couple living together. This money is not enough to live above the poverty line, and whilst being useful, should not be relied upon as the only income in your retirement.

Therefore you should look at other pension options.

What other pension options are there?

Most people will find that their workplace offers some form of a pension scheme, usually contributing to your pension fund on your behalf, if you contribute yourself.

Those who work in some businesses or the public sector may find they are offered a final salary pension, which will pay a percentage of either their final salary, or their average salary while they worked at the company, which they will contribute some of their salary towards throughout their working life.

With annuity rates so low, these final salary schemes are some of the most generous, and some will even pay half of your final salary for the rest of your life, which is a lot more than you will get from the state pension alone.

Other pension options include a stakeholder or personal pension. These pensions are privately run and managed, and you pay a contribution into the fund on a monthly basis, or in a lump sum. The money you pay in is then invested on your behalf, and when you reach retirement age, you can withdraw the money and buy an annuity with it.

Other pension options include a SIPP, which is a self invested personal pension, which allows you to effectively manage your own pension fund, and a group personal pension, which allows you to invest your pension fund with a group of like minded individuals.

For an estimated pension forecast use our pension calculator today.