There are literally dozens of different types of pension scheme that have existed over the years, however, for the purposes of this section we will keep matters simple and look at the current type of pension plans that are available to you.
In essence there are 3 different types:
- Personal schemes
- Company or occupational schemes
- Offshore schemes
Whatever pension you may come across will probably be a variation of one of the above. For most people they will either be in a company scheme or a government backed occupational scheme or they will be running their own personal scheme.
Offshore pension schemes are particularly relevant for people who have issues relating to domicility and residency or who are going to be working abroad for many years or who are likely to move abroad in retirement.
Not all pension schemes are ones that are recognised in the UK. In order to get tax relief and to get the ‘normal’ tax treatment of a UK pension, the scheme would normally need to be registered in the UK. Personal pensions are such a scheme.
Under the Personal Pension banner you will find such things as stakeholder pensions and from older days Section 226 plans and other forms of personal arrangement.
Whatever scheme you wish to use would be dependent to a certain extent on your circumstances. For example, there would be little point in having an offshore pension arrangement if you are not working offshore or have limited prospects of retiring abroad. Likewise if you are not offered a company pension scheme this is going to be of no relevance to you.
Getting the right sort of pension is important but it is also likely that in most peoples lifetime they may well end up with more than one type of pension at different times. Managing these and mixing these in the right order is very important.
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