Personal Pension Schemes

Personal Pension Schemes

If you’re relying on your state pension to support the post-retirement lifestyle you’ve always dreamed of, then it may be time for a review. With the current state pension set at just £164.35 per week, this is unlikely to accommodate a retirement that fulfils all your wants and needs.

At Vintage Wealth Management, we offer both Personal Pensions and Stakeholder Pensions to clients wishing to improve their post-retirement income and quality of life.

Personal Pensions

A Personal Pension provides you with a tax-efficient savings vehicle allowing you to accrue a pool of money to be used as you wish when you come to retire.

  • Available to UK residents under the age of 75
  • The policyholder contributes to the plan and funds are invested
  • The amount payable on retirement is dependent on how much has been paid into the plan, investment fund performance and the annuity rate on the date of retirement.

This type of plan allows you to take either an income in retirement or a reduced income and up to 25% of the fund as a tax-free lump sum.

Stakeholder Pensions

Stakeholder Pensions work in essentially the same way as Personal Pensions with a number of government-set minimum standards, as follows:

  • The pension must provide an income for retirement using a minimum 75% of the fund. The remaining 25% can be taken as a tax-free lump sum;
  • Since 2005, the maximum annual charge is set at 1.5% of the fund value each year for the first 10 years, then 1% thereafter;
  • A minimum contribution of £20 per month but you can stop payments at any time;
  • The plans have no entry or exit penalties;
  • If you do not choose a fund, your money will be invested in a ‘default investment fund’.

While both options offer basic rate tax relief benefits, there is a limit to the amount you can contribute in any one year that can benefit from tax relief (known as the annual allowance).

Our pensions experts will walk you through everything you need to know and provide further information about the range of options available.

*The increased state pension allowance was introduced in August 2017 and applies to those who retire after April 6, 2018.