Pensions can be quite an overwhelming subject matter and for person-to-person, pension preferences differ. It could be that monthly out-going and you are unaware of where the money really goes, or it could that you are positive that your pension scheme suits your desires. Here at Acumen Financial Partnership, a leading provider of financial advice, we are here to provide you with a brief overview of basic pension information, suitable if you are a complete novice to pension schemes.
How do pensions work?
Retirement might sound like a long time away, and it can be the least of your worries. But when it comes to retirement planning, a pension is the most important financial investment you will ever make. It can make the difference between a comfortable retirement or a problematic one.
A pension plan works as a plan for your retirement. As there are many pension schemes available, all working in different ways. They all have a sole aim is to provide you with a retirement income. The most commonly mentioned pension scheme is the workplace pension, whereby an employee adds money into a fund, normally automatically every payday. In the majority of cases, the employer also makes a contribution to your pension scheme. In terms of how much you contribute to your pension, every pay-day is determined by the pension scheme your employer has chosen. You also receive tax relief from the government for your pension.
Pensions in the UK
In the UK, there are three broad types of pensions:
- Work-based pensions
- Personal pensions
What is a Workplace Pension?
There are an abundance of workplace pension schemes available, and your employer will have already made the decision on what scheme to use. In terms of the way your pay-out is calculated upon retirement, depends on the type of workplace pension your employer has set out. The two main types of pensions are; defined benefit schemes and defined contribution schemes. Both types differ in terms of how your pension is paid out.
What is a Personal pension schemes?
Personal pension schemes offer you the opportunity to take control of your pension. A personal pension works by selecting a pension scheme on your own accord, rather than one already being assigned to you. Sometimes known as defined contribution schemes, the money you invest into your personal pension, is then put into investments (stocks and shares) by your pension provider.
Likewise workplace pensions, there are many personal pension types and if this sounds like something that could be of interest to you, at Acumen we are specialists in Pension Advice and can point you in the right direction for a pension scheme. We can analyse your financial information and question your individual retirement desires to help you choose the best pension plan.
What is a State pension in the UK?
The all new state pension in the UK is £168.60 per week. Although, the actual amount you receive depends on your national insurance record. The amount can be higher depending on if you delay your state pension or have an amount over your state pension.
It is worth noting that you can still receive a state pension alongside your other income, for instance a private pension or workplace pension.
Why choose Acumen
At Acumen, we can help point you in the right direction for your pension. As pensions are one of the most worthwhile investments you can ever make, finding the right pension scheme to suit your retirement plans is essential.
Our expert pension planners are on hand to advise you on anything from how your pension works to providing you with the best possible advice to reap the maximum possible pension benefits.