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Pensions Advice

Posted: Friday, November 13, 2009

by Peter Nadin
Venturonet

Saving for your pension has never been so important.' [1] Pensions are one of those things in life we really need to start planning as early as possible. This is due to the amount of stress that CAN build up IF there is not clear advice given about the best way to deal with a pension, how to get the best pension possible and all such related problems.

Most people choose not to start planning for retirement because of different complicated reasons such as not wanting to think that far ahead. However, if you leave it too late, problems can arise such as not being able to afford it and not knowing which pension companies are best; all causing unnecessary stress.

Here is some information on pension schemes to help define the appropriate pension in order to have a clearer idea of what to look for. This will be vitally important when it comes to that necessary time of starting to plan for retirement.

Pension Schemes

Final salary pension schemes are also referred to as employer pensions. Over recent years, some of the country's biggest employers have abandoned "final salary" schemes in favour of money purchase schemes. [2]'; the reasons for this are drops in interest rates, life expectancy increases and falling stock markets.

Final salary pension schemes will most likely have to move to a money purchase type pension; this is a contribution scheme where employees pay a contribution of about 5% of their salary, but responsibility for the plan still belongs to the employer.' [3]

Stakeholder Pensions are pensions offered by employers. However they are normally provided by such financial companies as building societies, insurance providers and banks. Many people set up stakeholder pensions instead of their own personal pension.' [4]
Retirement Pension, also known as Superannuation Plans are most commonly set up by employers to provide income to employees once they have retired. This pension scheme is becoming increasingly popular in the US (concerning 1940 - wage increases were not allowed).

If you want advice on which type of pension to choose you should consult an independent financial adviser or one of the organizations... For more information on how to obtain financial advice you should consult an experienced adviser, for example, a Citizens Advice Bureau.' [5]

References

http://www.thisismoney.co.uk/pensions/article.html?in_article_id=492779 & in_page_id=6, How to make the most of pension saving, (This is Money, Date N/A)
http://news.bbc.co.uk/1/hi/business/2231223.stm, Q & A: Final salary pension schemes, (BBC News, September 2002)
http://www.prudentminds.com/pensions.html, Pensions, (Prudent Minds, 2009)
http://www.adviceguide.org.uk/index/your_world/consumer_affairs/pensions.htm, Types of Pensions, (Advice Guide, Date N/A)

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