Personal Pensions represent a popular and attractive way of saving for your retirement.
All monies invested into your fund grow free of capital gains tax, and the contributions you make are enhanced by income tax relief at source. For example if you invest £80, the government adds on tax relief (currently 20%) to enhance your contribution to £100! If you are a higher rate taxpayer you can claim additional relief through your pay coding. An annual allowance of up to £60,000 (2024/2025) is available as well as the possibility of utilising potential carry forward of unused reliefs.
A personal pension is an arrangement made in your name over which you have personal control. You can alter your contributions, suspend them, or stop them completely.
You will currently be eligible to take 25% of your accumulated fund tax-free when you retire (as at 2024), the earliest age being from 55 (rising to 57 from 2028). There are a range of options when you decide to take benefits such as purchasing annuity or electing for capped or flexible drawdown of your plan benefits.
Personal Pensions usually offer a range of investment mediums to suit your attitude to investment risk, and you can change your investment at any time.