What is a Personal Pension the basics?

A personal pension is exactly what it says on the tin and you can have one if you're employed but not in a company pension scheme, or you might want to have one in addition to a company pension. Or if you are self employed you may want to set up a personal pension or even if you are not working but can afford to put aside money for retirement you can have a personal pension.

You can pay a regular amount (usually monthly or annually), or a lump sum to the pension provider who will invest it on your behalf. The overall final value of your pension will depend on how much you have contributed over the years and how well the fund's investments have performed. Charges are made for setting up and running your pension and are normally deducted from your fund in the form of fund management charges.

The Annual Allowance for pension contributions is £40,000pa from 6 April 2014 this includes both employee and employer contributions. You can carry forward unused contributions from the previous three years (ie. back to 2011/2012 for 2014/15), potentially allowing contributions of up to £160,000 in a single year. HMRC has confirmed that you do not need to have made a contribution to a pension scheme in a year to be able to carry forward unused allowances – you simply need to have been a member.

For each pound you contribute to your scheme, the pension provider claims tax back from the government at the basic rate of 20 per cent. In practice, this means that for every £80 you pay into your pension, you end up with £100 in your pension pot. Enable’s IFA’s can help you decide if you want to set up a Personal pension.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Capping Pension fees,,,

Bishop’s Stortford’s IFAs at Enable are keen to make sure people are aware of the management fees they pay for their pensions. With the onset of auto enrolment meaning that over the next five years, all workers aged between 22 and state retirement age who earn at least 9,440 pounds a year will be enrolled into a private pension scheme selected by their employer, unless they are already in a scheme or they opt out.

The average annual fee for these schemes is 0.51% of assets under management, but more than 150,000 people are in schemes where the fees exceed 1%, the government said. "Enough is enough on charges. People need to know they are getting value for money when they save into a pension and not being ripped off," pensions minister Steve Webb said.

Among the options are blanket fee caps of 0.75%or 1%, and allowing fees above 0.75% only when an employer seeks a special exemption, he said. Reducing an annual fee from 1.5% to 0.75% would give someone who saved 100 pounds a month for 46 years an extra 100,000 pounds at retirement.

The Association of British Insurers reacted cautiously saying it was worried that a formal cap might encourage some pension funds to raise charges up to that level. Other experts expressed concern that the campaign for lower charges deflected attention from a push to improve the overall quality of pension provisions and may lead to a proliferation of "basic" products which failed to meet the needs of savers. "A charge cap only looks at what people are paying and not at what they are getting for their money ... At Enable our IFAs will happily address what you are getting for your money in  your pension pot.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE.