Private Pension Plans – your future in your hands
Private pension plans are increasingly in demand by those who wish to take control of their personal retirement planning.
As government continues its review of the whole pensions sector in a bid to reduce the cost of pensions provision for the state, many employees see a private pension plan as a way of having greater influence over their own pension planning.
Private pension saving, based on personal pension advice from a qualified adviser, can aim for a specific income you would like to achieve from your private pension plan. As a preliminary, this can be calculated using the Principle First online pension planner tool, where by entering the target amount you wish to have to live on in retirement, you can see how much you should be devoting to your private pension plan today.
Find out more about private pension plans – contact us for Pension Advice now.
While there are various types of personal or private pension, they generally offer access to a wider range of underlying investments than the simpler stakeholder pension model, and charge a higher fee.
Savings into private pension plans attract tax relief from government equivalent to the rate of tax that is applied to your wage. If you pay tax at the basic rate of 20%, every £80 you save into your personal pension will attract £20 in tax relief. If you are a higher rate taxpayer whose marginal rate is 40%, you will receive half your tax relief paid into your pension, and the other half you can reclaim via your tax return.
Private Pension Plans with greatest flexibility – Self Invested Personal Pensions
Perhaps the most flexible private pension plans are self invested private pension, or SIPPs.
A SIPP private pension can contain a range of other investments, including government securities, unit trusts, and bank deposit accounts.
The ability of a SIPP to acquire commercial property can make it a particularly attractive means of private pension saving for those who are asset-rich, but cash-poor. For example, if a businessman owns his own business premises, he can have immediate access to all or part of the cash value of that property by selling it to the SIPP. If he chooses to sell the whole property into the SIPP, his SIPP private pension becomes the owner of the property.
Then, the business can pay a commercial rent for the property into the SIPP. This is free of tax, and boosts further the value of his private pension saving in his SIPP private pension plan.
Take pension advice from a Principle First pension expert about private pension plans. Contact us with a pension enquiry or ring freephone 0800 678 5929 now
