Transferring To A Personal Pension Plan

If you have a frozen pension plan, you can choose to transfer the funds into a personal pension plan. A personal pension, also known as a private pension, is a fund you can use to save for your retirement. You can either use it as a second pension to your occupational pension scheme, use it as your sole pension plan, or transfer funds into one from an existing scheme.

Personal pension plans can be offered in a number of ways:

Stakeholder Pension

If your company employs more than five people, it is obliged to offer a stakeholder pension scheme. These schemes encourage saving for retirement, by offering a capped-cost, flexible contribution plan, where the employee can contribute direct from salary. Employers can choose whether to make additional contributions to the scheme or not. Employees can pay in as little as £20 per month and can change their contribution levels whenever they want or need to.

Company Personal Pension Schemes

If your company decides not to offer a stakeholder scheme, it may offer a different type of personal pension plan. If they do this, the scheme must offer at least the same benefits as a stakeholder plan, and the employer must commit to paying 3% of your salary into the plan, but they don't have to pay the management and administration fees. In addition, companies may choose to offer a Group Personal Pension scheme, where the company chooses the fund administrators. You can take this pension scheme with you when you leave the company and continue paying into it when you start your new job. Because the plan is for a group of people rather than an individual, the scheme provider may reduce the administration costs.

Individual Pension Plan

If your company doesn't offer any pension provision, if you have decided not to take advantage of the scheme offered by your employer, or if you are self-employed, you should speak to an independent pensions adviser and set up your own personal pension plan. Whilst this may not offer the same range of benefits as a top class corporate pension, it still gives you the opportunity to save a significant amount for your retirement. In most cases, personal pension plans are flexible, so you can vary the amount you save and you may be able to invest a lump sum in the scheme in addition to your regular payments.

Pension Advice

The most important thing when it comes to transferring funds to a personal pension is to seek expert advice. Independent pensions advisers have experience and market knowledge which means they can assess your circumstances and recommend products that will provide you with the security and income you are looking for in retirement.