Personal Pension

If you are not a member of an occupational pension scheme and you wish to make pension provision for yourself, you may choose to save using a personal pension

What is a personal pension?

A personal pension is your own pension scheme into which any one between the ages of 0 and 74 and 11 months can make a contribution .

Do I get tax relief on the contributions?

20% tax relief is given at source. If you are a higher rate taxpayer you claim back the additional 20% via your tax return and your PAYE code is adjusted

How much can I invest?

The amount which can be invested is 100% of earnings up to a maximum of £40,000 ( Tax year April 2016/17) and it will be possible to carry forward unused reliefs from the three previous tax years.  This calculation may be complex particularly if you have been a member of a final salary scheme. Nicholls Stevens will assist you in making this calculation

If you have no earnings It is still possible to make a net contribution of up to £2,880 each tax year. this is grossed up to £3,600 by tax relief

When can I take benefits?

You can take the benefits at any time between age 55 and75

What benefits are avalable?

The amount of the benefit depends upon investment performance.A fund is built up from which at any time between age 55 and 75 a 25% tax free lump sum can be withdrawn plus an income for life. The income can be secured by the purchase of an annuity or the income can be drawn down from the fund over a number of years.

Choices you will need to make

Nicholls Stevens can help you make these choices

  • You will need to chose an Insurance Company or Provider to run your scheme
  • You will need to decide on an asset allocation based on your attitude to risk
  • You will need to decide on the funds into which you will invest
  • You will need to decide whether you should be a member of your employer’s workplace pension.

You will need to decide how much you are prepared to pay the Insurance Company to run your pension scheme – it maybe that the cheaper Stakeholder Scheme may be right for you.