Personal Pension Plans

Designed to offer a lump sum and income in retirement, a personal pension is available to any United Kingdom resident who is under 75 years of age. When you contribute to a Personal Pension plan, your money is invested and a fund is built up. The amount of pension payable on retirement depends upon:

• the amount of money you paid into the scheme;
• the performance of the investment fund
• charges payable under the plan
• the 'annuity rate' at the date of retirement. The annuity rate is the factor used to convert the pension fund into a pension.

Currently a Personal Pension scheme member can retire at any age between 55 and 75. At retirement, you may normally take up to 25% of the value of your fund as a tax-free lump sum, with the balance commonly being used to buy an annuity.

A pension is a long term investment. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.

The value of your investment and income from it is not guaranteed it can go down as well as up due to fluctuations in investment markets, and you may not get back the full amount invested.

Levels and bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor