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Advice on Pensions

A pension can provide a lump sum at retirement, a long-term return plan, a promise of family security in the event of death, as well as many other benefits.

Types of pensions

Many employers offer a pension scheme that pays a percentage of an employee’s wage, or matches any employee contributions, which is held in an independent account.

Other pension options are available, including:

  • state basic pension
  • state second pension
  • personal pension schemes.

For advice on what sort of pension you may be entitled to out of those detailed below, you may wish to consider speaking with an authorised independent financial adviser.

The basic state pension

Depending on an employee's contribution of National Insurance, up to £113.10 a week may be available through the basic state pension.

The male pension recipient age is 65, and women born prior to 6 April 1950 are able to claim a state pension at age 60, while those born post 6 April 1955 won’t be able to claim until reaching age 65. Women born between the two dates, dependent on their date of birth, are able to claim their pension between 60 and 65 years.

This form of pension does not however provide sufficient funds to live off, so a supplementary scheme is recommended.

Second state pension

The second state pension replaced the State Earnings-Related Pension Scheme (SERPS) in 2002. This scheme will provide you with an additional state pension if you meet eligibility criteria. How much you receive will depend on your earnings and National Insurance contributions.

Occupational pension schemes

Occupational schemes are provided by employers and are also more commonly known as company pension schemes. An employer will ordinarily pay a contribution towards long term retirement benefits, supplementing the employees’ additional contribution. Occupational pension schemes are considered to be the most profitable type of pension.

Retirement benefits usually include:

  • a regular retirement income or a tax free lump sum
  • benefits upon early induced retirement, i.e. through sickness or ill health
  • benefits for spouse, partner and children in the event of death.

Personal pension schemes

A personal pension is an arrangement initiated independently; it is primarily for the self-employed or those who are unable to join an occupational pension scheme. Banks, building societies or insurance companies all supply personal pension schemes, and a return amount will depend on your savings contributions, although it is generally more affected by investment measures and interest rates than other schemes.


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