What is a Regular Premium Pension?

A Regular Premium Pension is a Pension arrangement or saving for retirement solution where an eligible person makes a regular contribution or premium into a regulated individual pension plan.

Individual pensions are all forms of Personal pensions and Stakeholder pensions.

 

What are the types of Regular Premium Pensions?

Regular Premium Pensions will usually include some form of pension arrangement from one or several of the following recognised and regulated pension schemes, as follows:-

  • Regular Premium Pension Plans: Are technically termed ‘money purchase arrangements’ or ‘individual defined contribution pension schemes’ where regular contributions which attract tax relief in built up funds are made in a selection of investments to purchase benefits such as a pension income (taxable) with a 25% tax free cash amount from the fund at the chosen retirement date. Typically they will include all forms of Personal and Stakeholder Pensions and Group Personal and Stakeholder Pensions.

 

Why should I make regular contributions to a Pension Arrangement?

The major reasons for recommending regular contributions to a pension plan is the tax relief available on the contributions and the tax exemptions available on encashment or retirement when benefits are drawn, such as the 25% of the built up fund as tax free cash. Additionally any employer contribution made into a scheme on a member’s behalf will boost size of fund until benefits are taken.

Nevertheless, there are certain annual contribution limits (annual allowance) which will differ for earners and non-earners and size of built up fund limits (lifetime allowance) to qualify for tax relief or tax exemptions, and fund charges applicable to any of the pension arrangements which must be considered, together with any additional death benefits of the funds and the implications of early encashment due to ill health, fund transfers rules and charges or stopping contributions.

 

How do I make regular contributions to Pension Arrangements?

The first and most important step after you have decided you may want to make regular contributions into a pension arrangement is to have a discussion with us to provide you with independent financial advice.

Once we have agreed what the most suitable type of pension arrangement is for your particular circumstances we make an application on your behalf to make regular contributions into a selected fund based on how much you can afford, any contributions being made or were made to all other existing pension schemes or deferred schemes, your personal tax situation and the amount of fund required at retirement, at the acceptable level of risk you are prepared to take to match your needs.

 

Want to know more?

Talk to one of our qualified financial advisers on 01553 777600 or e-mail us at enquiries@ringassociates.co.uk

Also you may want to read the articles associated with Pensions and Retirement from the Financial Services Authority website at http://www.moneymadeclear.fsa.gov.uk/products/pensions/pensions.html and http://www.moneymadeclear.fsa.gov.uk/tools/stakeholder_pensions/notes_index.html

Also you can download the free booklet ‘Just the facts about pensions’ from the same website at

http://www.moneymadeclear.fsa.gov.uk/pdfs/pensions.pdf

Additionally you can download the booklet ‘Just the facts about retiring soon’ at http://www.moneymadeclear.fsa.gov.uk/pdfs/retiring_soon.pdf

and also the booklet ‘Just the facts about your retirement options’ at

http://www.moneymadeclear.fsa.gov.uk/pdfs/retirement_options.pdf