Personal Pensions

 

Employees may prefer to set up personal, "portable" pensions of their own. Those who are self-employed also do so, as well as those people who’s employers do not provide a pension scheme.

 

You need to think very carefully, and take advice, if you decide that you do not wish to join your employer’s pension scheme.  Most employers will make contributions to the scheme on your behalf and you should have a very good reason for giving up this valuable benefit.

 

In this case, as with defined contribution schemes, contributions are set aside in the pension plan and used to purchase an annuity before age 77.

 

One of the great attractions of pension schemes as a method of saving for retirement is that there is tax relief on contributions up to government set contribution limits. There is no other investment you can make which will give you 22% or 40% tax relief, depending on the highest rate of tax you pay.