RETIREMENT PLANNING    

Occupational pensions
Personal Pensions
State pensions
Annuity

  Pensions are the tools used to plan for someone's retirement. There is a saying that "the difference between an old man and retired gentlemen is the pension they have".

There are three main groups of pensions. Those that someone builds through their emloyer, those they build personally and those that will be provided by the state or government.
 
  As an incentive to encourage people to save long term for retirement, pensions are given generous tax treatment.
           
   
 
         
 
 
 
   
               
 
       
             
         
         
               
   

Pension Credit:
Tops up those with low income so they have a minimum acceptable level.

Availble to aged over 60 wit low income & over 65s with some savings.

Paid as :
Single : £130 pw.
Joint : £198.50 pw

  
BASIC STATE PENSION
from age 65 (men) or 60 (women)
Based on number of years NI contributed - not enough no pension.
It is PAYG (pay as you go)
  weekly
 monthly
One person with a full National Insurance
contribution record
£90.70 £393.03
Full rate based
on a spouse’s
National Insurance
contribution record 		£145.05 £628.55
Couples who have both paid full National
Insurance contribution 		£90.70
each		 £393.03 each
State second pension :
Is based on level of NI contributions. More you pay, more you will get at retirement.
Employed only.
Can be contracted in or out.
  
       


   
               
             
             
         
         
    The final pension is based on the return from an investment over number of years (primarily from stocks and shares). Therefore the final value is unknown.
Common money purchase schemes -
Personal pensions (PP), stakeholder PP, Group PPs, occupational PPs.
Final value of the pension is defined at the begining. It is based on the following :
1. Number of years worked.
2. Final salary.
3. Accruel rate e.g. 1/60, 1/80.

Best type of pension scheme for employed.
A type of money purcase scheme used to buy added years to the final salary scheme.