If you have seen our previous post http://www.lyndhurstfm.co.uk/blog/pensions/what-do-the-olympic-games-in-london-and-pensions-have-in-common/ It is known that from 2012 it is planned that all eligible workers, who are not already in a good quality workplace scheme, will be automatically enrolled into either their employers’ pension scheme or a new savings vehicle, which is currently known as a personal account scheme. We have identified below some advantages and disadvantages of an appropriate Group Personal Pension Plan Vs Personal Accounts. It is important to know whether your current company scheme is appropriate as an alternative to personal accounts, or if you don’t have a scheme to arrange one and maybe more importantly for small businesses budget for one.
Personal Accounts Vs Group Personal Pension Plans
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Personal Accounts |
Group Personal Pension |
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· Limited Fund Choice – if no choice is made a default fund will be chosen
· No transfers in or out for 5 years
· Limited retirement choice – 25% tax free cash and purchase an annuity
· No ongoing service
· Low charges
· Maximum contribution £5,000
· Contributions 3% employer, 4% employee, 1% tax relief
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· Wider selection of funds allowing your plan to be actively managed and achieve higher performance
· Can consolidate all pension plans under one arrangement and transfer out at any time
· More flexible retirement options including phased tax free cash and income withdrawal
· Ongoing service and analysis of funds and performance
· Low charges
· Maximum contribution 100% of salary
· 20% tax relief on all personal contributions (40% for higher rate tax payers)
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http://www.lyndhurstfm.co.uk/enquiry.html or admin@lyndhurstfm.co.uk to arrange a chat about your employee benefits and pension arrangements.
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