Although the pension industry has not had the best of Press in the past few years, modern pensions are, in fact very good. However, many people will still have pensions from the bad old days when they were complex and over charged. People will have pensions of all sorts and types from annuity based schemes, to final salary schemes, section 32 buy-out plans, 226 pensions, small self-administered schemes and all sorts of other weird and wonderful plans.
Much of the legislation now is geared around Personal Pensions and the rules applying to Personal Pensions are now much more straightforward and in many ways much more generous. In addition, through the stakeholder pension legislation the Government managed to establish a much kinder charging arrangement for pensions so modern pension plans tend to be relatively flexible and low charged.
Of course it is very important to remember that retirement planning is not just about pensions. Pension plans can form a very important part of retirement planning and should probably do so in most peoples cases, but retirement planning is about having a diversity of different types of plans which can embrace all sorts of other investment types, most notably including ISAs.
Reaching retirement is about making sure that money is spread into different areas for different purposes. Pensions play an important part in this respect and of all the available investment options pensions are going to be the most tax efficient, particularly for high earners.
With the advent of Self Invested pensions and their popularity growing by the day, pensions are now not only very cost effective also there is an endless variety of investments that can be held within the pension.
As with all such things though taking professional advice before instigating any form of pension arrangement makes absolute sense. This is simply because an experienced independent adviser would be able to ensure that the right pension was in place for the particular set of circumstances and that could be a different company and plan depending on the individual. |
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