The value of pensions and the income they produce can fall as well as rise. You may get back less than you invested.
By using Pure Financial Services you can feel confident that our professionals will help you every step of the way to choosing the right pension plan to suit your own individual circumstances. Pure Financial Services offer a bespoke, individualised service catering to your own particular situation. There are many types of pension currently available on the market each with their own pros and cons. At Pure Financial Services we take our time to get to know our clients so that we can use our extensive expertise in the pensions sector to deliver the perfect pension plan to suit their needs. Pure Financial Services is an independent company so we can search out the most suitable options for our customers. We will ensure that you are fully briefed about the plan we recommend so that you can feel totally confident that you understand precisely what you will be getting. We can make sure that any plan we suggest will take into account any tax or inheritance implications. By using Pure Financial Services we will ensure that you will be in a position to make an informed decision as regards your pension provision.
In short, pensions fall into 4 basic categories:
1. Personal Pensions (including AVCs and FSAVCs)
These schemes were set up to allow workers who were already in an occupational pension to pay extra contributions in order to build up an additional pension pot. They were designed to be an addition to the workplace pension with benefits taken at the same time as the occupational pension. With this type of pension you pay in a certain amount of money per month and the funds are invested in stocks, shares and other investments. Your pension provider can claim tax relief at the basic rate although higher rate taxpayers can claim additional tax relief on contributions through their tax returns.
2. Self Invested Personal Pensions (including Hybrid SIPPS)
Basically these pensions are like DIY pensions in that you can decide how your pension pot is invested. This type of pension allows more freedom and flexibility and can be managed online. The SIPP pension also qualifies for tax relief however set up fees, annual charges, fund fees and exit fees need to be taken into account with this type of pension.
Hybrid SIPPS are a halfway house between a traditional pension scheme and a SIPP. These are usually offered by insurance companies such as AXA, Aviva and Legal and General.
3. Occupational Pension Schemes
This is when an employer organises a pension scheme for its employees. It can take the form of a trust run by trustees or it can be administered by a life insurance company. There are two types of occupational pension scheme, contributory- where you pay in a percentage of your salary each month or non-contributory where your employer makes all the payments on your behalf.
A Money Purchase or Defined Contribution scheme is where you build up your own pot of money within the scheme so your pension will be based upon how much is paid in, how long it has been invested, any charges incurred and the return on the investments.
Final salary schemes are regarded as the 'gold standard' in relation to occupational pension schemes as you are guaranteed a pension based on your final salary prior to retirement and the number of years that you have contributed. However the amount you receive is limited to two thirds of your final salary. Once again, these pensions qualify for tax relief on contributions.
4. New Workplace Pensions
Auto-enrolment is a government scheme whereby employers are legally obliged to enrol their employees into a pension scheme. In this type of scheme both the employer and employee are required to contribute to the pension.
Choosing the right pension is probably the most important decision you will ever make. By choosing Pure Financial Services you can relax in the knowledge that you are in safe professional hands.
Please note the value of investments can go down as well as up and you may not get back as much as you put in.
The Financial Conduct Authority do not regulate inheritance tax planning auto enrolment and Trusts.