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retiring? There are many options available in Britain today.
The State Pension is based on a worker’s National Insurance
Contributions, which come right off his or her paycheque. A
self-employed person or one without a job may also make
contributions to ensure eligibility for a State Pension. The State
Pension is not automatic, but depends on a person’s having worked
and/or made full-rate contributions for at least 90% of his or her
working life, which begins at 16 or so when leaving school.
Maximum contributions will bring you a guaranteed £92.15 a week if
you are a single person. A couple receives £140. Since the State
Pension is supported by current workers’ contributions, the outlook
is not cheery for the aged in a future with fewer and fewer young
You can build State Pension credit working in other EU countries,
and you can retire (and collect) almost anywhere in the world.
You might also qualify for the State Second Pension, which is an
additional amount based upon how much you earned in your career.
When you are nearing retirement age (and this age is going up), the
government will calculate how much this amount could be.
You can also start a Personal Pension, where you can contribute as
much as you like to your fund, and receive a tax benefit that can
equal your year’s income from salary and regular investments, up to
£255,000 beginning in 2010. Even if you do not work and make only
modest contributions to your Personal Pension, the government will
match your money – put in £80 and the government will add £20, until
your yearly contribution reaches the maximum of £3600.
There’s the Stakeholder Pension, much like the Personal Pension,
except that the fees to manage the fund are much lower. Investments
are placed in passive “tracker” funds, so Stakeholder funds are not
managed with quite the same attention as those attended to by a fund
manager as in Personal Pension investments. However, some say the
Stakeholder plans’ lower fees may offset the differences in
A Company or Occupational Pension is a program managed, and
contributions made, by your employer, who might instead provide a
low-cost Personal Pension plan. If you change employers, you may be
able to transfer your old Company Pension into a Personal Pension,
or join your new employer’s plan.
|Pensions - probably the largest choice of
Pensions in the UK!