|Bookmark this page! |
Pension Plans for the UK
Having a pension plan is one of the best financial securities. With some pension plans, you can receive tax reliefs on the money that you have placed into the plans. The earlier a pension plan is started, the more financial stability you will have at retirement.
There are four main types of pension plans. These include: Personal Pension Plan, Company Pension Plan, Stakeholder Pension, and State Pension.
With the personal pension plan, you save money for retirement by using a pension provider who invests your money which should increase over time.
Similar to a personal pension plan, the company plan is provided by the person's place of occupation. These are not available to self-employed persons or to employees whose work place does not offer a pension plan.
In April of 2001, the UK government introduced the Stakeholder's Pension. It is a personal pension that has limits to how much it costs and are a flexible type of pension. You are charged by the provider of the pension for running the fund. There is usually an initial charge and an ongoing charge.
The State Pension is the most complicated out of all of the pensions and pays the lowest. Currently, the UK state pension age is 60 for women and age 65 for men. By the year 2020, the state pension age for women will be 65 years. The Pensions Act of 2008 requires all employers to offer pension schemes to their employees and to enroll them into that pension.
There are other types of pension plans available that the pension provider should be able to explain in detail. One example is the Profits Pension Plan or fund. These invest in both UK and overseas shares, cash deposits, etc.
Another type of pension is Unit Linked Funds. These tend to be more risky plans as they tend to fluctuate. The returns can be better in the long run. There are different types of Unit Linked Funds. These are: Tracker Funds, Lifestyle Funds, Managed Funds, and Specialist Funds.
An Over 80 Pension is a non-contributory plan available to those over the age of 80 years who have little or no State Pension. If an individual this age or over currently receives a State Pension that is reduced, he/she may receive additional money if an Over 80 Pension is claimed.