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Which type of pension to choose

Pension planning for retirement can sometimes be a complex subject to understand. Bond Financial Limited can, if appropriate, give you guidance and advice over the various options available to you.

Company Pension Scheme

For the majority of employees, joining the Company Pension Scheme is generally accepted to be the most appropriate route to adopt and full details should be available to employees detailing the cost and benefits of joining such an arrangement.

Stakeholder Pensions

A pension plan (in the UK), intended primarily for those who do not belong to a company pension scheme or who are self-employed, which invests the money a person saves and uses the fund on retirement to buy a pension from a pension provider.

Before 2001 there were vast variations in the terms and conditions offered by Personal Pensions which made comparison, and therefore choice, difficult. With the introduction of Stakeholder Pensions all policies will adhere to set minimum terms making it easier to compare like for like.

Current legislation means that:

  • Stakeholder pensions charges will be lower than many former personal pensions.
  • They offer attractive tax incentives, as contributions will be eligible for tax relief, as do the investment returns on the fund.
  • There are no start-up charge, and the maximum charge for the funds being managed is 1% per year.
  • Stakeholder pensions are very flexible, so members can stop and start payments if they need to without penalty.
  • They accept transfers in from other Stakeholder schemes at any time, and there will be no additional charge to transfer to another Stakeholder provider.
  • With a Stakeholder pension, members are able to continue contributions during periods of unemployment and the years spent raising a family.
  • When members retire, they are able to take part of the benefit as a tax-free lump sum.
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