Pensions

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Pensions

Pensions

Welcome to the pensions pages. The aim of these pages is to give you the information you need to make informed choices about your retirement income and pension plans. They cover all the key aspects of pensions and contain links to other web sites which allow you to investigate specific issues in more detail.

Policy on pensions is just beginning a period of great change. All parties, irrespective of political colour, are agreed on major aspects of policy that will shape pensions for the foreseeable future. These are that:

  • The state pension age for everyone will rise; over the next fifteen years to 67 for everyone and at periodic intervals if longevity rates continue to rise.
  • Employers must offer and enrol eligible employees into an occupational pension scheme to which both the employer and employee contribute. Employees who do not wish to participate will need to actively opt out.
  • Individuals in defined contribution schemes should have more freedom to decide how they use their pension pots to provide a retirement income.

The pages reflect and explain these changes. They:

  • Set out why it’s important to have a pension plan for securing a retirement income and look at the role that pensions and other methods can play in providing one.
  • Discuss the different types of pension schemes including the state pension, occupational pensions and personal pensions.
  • Set out in detail the two most common occupational pensions, the defined contribution scheme and the defined benefit scheme, look at the merits of each and compare them against each other.
  • Outline the current changes to pension law and practice and the new obligations on employers to provide an occupational pension and the implications for employees.
  • Summarise the options that are available to those who have pension pots in defined contribution schemes.
  • Explain the new “auto enrolment” rule and how they are applied and set out what employees need to do if they do not wish to be enrolled in an occupational scheme.
  • Highlight the issues involved in transferring a pension pot from one scheme to another.
  • Set out the features of a good pension scheme looks like and pulls together a checklist on what to look for.

Surveys on pensions show a fairly consistent mixture of worry and boredom. Many people find the subject dull and complicated, are wary of scams and distrustful of many who promote pension schemes. Given recent history this is not surprising. Add in the fact that pensions can be a fifty year investment programme and it’s not surprising that even the best schemes have a lot of unknowns.

Occupational schemes which tick the boxes in our checklist offer the best chance of securing a retirement income.  But it’s a subject where informed and independent advice is always valuable. Your union rep or pension trustee will be able to help and if necessary you can use the services of an Independent Financial Advisor.