Personal pensions
A good way of saving for retirement
A personal pension is a type of Defined Contribution (DC) pension. You choose the provider and make arrangements for your contributions to be paid. If you haven’t got a workplace pension, getting a personal pension could be a good way of saving for retirement.

Tax relief
Your pension provider will claim tax relief at the basic rate and add it to your pension pot. If you’re a higherrate taxpayer, you’ll need to claim the additional rebate through your tax return. You also choose where you want your contributions to be invested from a range of funds offered by your provider.
How they work
Your pension pot builds up in line with the contributions you make, investment returns and tax relief.
While you are working
The fund is usually invested in stocks and shares, along with other investments, with the aim of growing the fund over the years before you retire. You can usually choose from a range of funds to invest in. Remember that the value of investments may go up or down.
When you retire
The size of your pension pot when you retire will depend on:
- How much you pay into your pension pot
- How long you save for
- How much, if anything, your employerpays in
- How well your investments have performed
- What charges have been taken out of your pot by your pension provider
Following changes introduced in April 2015, you now have more choice and flexibility than ever before over how and when you can take money from your pension pot.
A personal pension is a type of Defined Contribution (DC) pension. You choose the provider and make arrangements for your contributions to be paid. If you haven’t got a workplace pension, getting a personal pension could be a good way of saving for retirement.
Personal pensions at work
A personal pension may be offered through your employer. These are called ‘Group Personal Pensions’ (GPPs) and are a type of DC pension which some employers offer to their workers. As with other types of DC scheme, members in a GPP build up a personal pension pot, which they then convert into an income at retirement.
Changing jobs
If you change jobs, check when your new employer will enrol you into a workplace pension scheme. You can continue paying into an existing personal pension, but you may find you’ll be better off joining your employer’s workplace pension scheme, especially if your employer contributes. Compare the benefits available through your employer’s scheme with your personal pension.
If you decide to stop paying into a personal pension, you can leave the pension pot to carry on growing, but check if there are extra charges for doing this.
Is it time to review your retirement plans?
These reforms present people with an exciting opportunity to take control of their pensions like never before, but the reforms highlight the need to obtain professional financial advice to consider your overall position. Although it may seem counter-intuitive, accessing your pension fund in many cases may be the last asset you call on, given the tax-efficiencies. To review your situation, please call us or use the contact form by clicking here – we look forward to hearing from you.
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