Other pension options

There are a variety of other pension options available to you. A selection of common solutions can be found below. Your Fairstone adviser can help find the right product for you and your circumstances.

Self-Invested Personal Pension (SIPP)

A self-invested personal pension (SIPP) gives you the opportunity to invest in a wide range of assets, including equities, unit trusts, gilts and commercial property.

Like all pensions, a SIPP offers up to 45% tax relief on contributions and is free from capital gains and income tax. At the point of retirement, you can usually take up to 25% of your pension fund tax-free.

SIPPs can be both flexible and tax efficient, however they do require active management so they won’t necessarily be for everyone.

An independent financial adviser can help you to decide if a SIPP is right for you and find the best solution to match your needs. You can also ask your adviser to manage your investment choices, so that you’re backed by expertise and experience.

Workplace pensions

Since 2012, employers in the UK have been legally required to provide a workplace pension for their qualifying workers.

Employee contributions are deducted directly from salary and are eligible for tax relief and your employer will also make contributions to your pension. There are minimum contribution guidelines for both you and your employer, which are currently set at 5% and 3%.

Your employer will notify you once you’ve been enrolled into their workplace pension scheme to explain how much they will contribute and how much you’ll need to pay in, as well as the type of pension scheme and who runs it.

Different types of workplace pension schemes have different benefits. It is important that you understand these so that you can ensure that your pension will help you to achieve your desired lifestyle in retirement.

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Annuities & drawdown

Annuities work by taking your pension savings and paying out a guaranteed income for life, or over a fixed term. They are still right for some people, but committing to an annuity can mean less flexibility with your pension money. With drawdown, money left in your pension pot when you die can be passed to your family.