What To Look For When Choosing A Pension
It can be overwhelming when looking through the various options when deciding on a pension as there are a lot of providers and a lot of choices. However, it is important to know what the best option for your particular needs is and with a few tips it is possible to know how to narrow down these choices and find a pension that works for you.
Personal
These are invested in stocks and shares, allowing you to choose a range of what to invest in. The amount you receive when you retire depends on how much you pay in, save and how much your employer puts in.
Stakeholder
These are the best options for people who want a little flexibility as you can vary the amount of money you can put in and when you put the money in. One additional benefit is the fact that you can start taking money from it after the age of 55, ideal if you need some additional support before you retire.
However, it is important to remember that with any investment funds can go down as well as up so consider this alongside other investments to spread the risk.
Employer
Your employer may enrol you in a pension scheme (a lot of companies now legally have to offer automatic enrolment). It may be an occupational or personal scheme. Some you receive automatically while others can allow you to pay extra into a fund. This is worth discussing with your employer to make sure you get the full benefits from them.
Self employed
Self employed people should not rely on the state pension – to qualify for the full amount you need 30 years of national insurance contributions. The best thing to do is pay in as early as possible. For example, if you start saving around the age of 25 you could build funds of around £123,000 compared to £75,000 of a late starter.
Using a pension calculator
A number of websites have pension calculators and this allows you to look at how much a pension could be worth after a period of putting money in. However, it is important to emphasise that this is an estimate and should not replace financial advice (especially not when making a final decision).
Get some help
Choosing a pension is a big decision and one that should not be taken lightly. Equally, if you have a pension with your employer you may want to know how you can take full advantage and get the most from it. This is why it helps to get the right advice.
At Larcomes we have a strong belief in being “big enough to specialise, small enough to care.” We have the resources to help you get more from your pension while also being able to take the time to discuss what is available to you and what will work in your personal circumstances.
For more information or to discuss your pension options in more detail please contact us today.