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Starting a pension plan?

Whatever the current changes in accessing your pension fund Enable’s Independent Advisors in Bishop’s Stortford know it is important to have one in the first place. Basically a pension plan is a form of saving to provide an income in your retirement. There are broadly two types of pension plan available.

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One is a Defined Benefit pension, often referred to as a ‘final salary’ scheme, this kind of scheme pays out a proportion of your salary as income payments when you retire. The other type of pension is a Defined Contribution pension, often referred to as a ‘money purchase’ scheme. This is where a certain amount is paid into a pension fund (an investment vehicle for your money) and accumulates throughout your working life to provide you with a pot of money to secure a retirement income. A personal pension is a type of defined-contribution pension where you choose the provider and make arrangements for your contributions to be paid. If you haven’t got a workplace pension and with many more people working for themselves this is more and more common form of pension.

For the vast majority of people the best way to save for retirement is with a pension but the complexity and cost can make starting something that is constantly put off.  Putting off starting a pension however can be an expensive mistake – a Standard Life survey recently found that UK savers’ biggest financial regret was not saving enough for a pension. Starting a pension early means you benefit from compound interest i.e. interest being paid upon interest effectively means the longer you have to save the less you have to put away. The other key advantage to pensions saving is that they are very tax advantageous, in plain English if a basic rate taxpayer invests £80, or a higher rate taxpayer invests £60, the government will top up that contribution to £100. Deciding how to save for your retirement is a vital part of any financial planning and Enable’s IFA’s in Bishop’s Stortford can help you explore your options.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 – Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.

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