Pensions - Are these important? : Wealth-Wisdom

Whether you’re 21 or 61 it’s important to learn about pensions and ensure you’ve made adequate provision for when you get older. Some may say, make provision for when you retire, others may say I’m never going to retire ‘cos when you retire one is more likely to wither and pass on to the land of no return.

What ever your age today, it’s best to be in the know. Ignorance is not bliss, it can be very expensive.

Below you’ll find some common FAQs on pensions and where you can go to find out more.

What are the different types of pension?
-State pension
-Company (occupational) pension
-Personal pension or Stakeholder pension

What’s the difference between these pension types?
A state pension in the UK is income received from the state (the government) at retirement. This state pension can comprise two parts, 1. The Basic State Pension (S2P) and 2. the State Second Pension.

At what age can I claim my pension?
For state pensions, the State Pension Age (SPA), if you are a woman, is age 60 and the SPA for men is 65. However from 2010 there will be a gradual change introduced which will last till 2020 when the state retirement age will increase to age 68 for both men and women.

For Company and Personal Pension schemes, the age at which you may claim your pension varies according to the rules of the company scheme.

What is the Basic State Pension (BSP)?
-The BSP is based on the number of qualifying years on your National Insurance record.

What is the State Second Pension (S2P)?
-This is paid in addition to the BSP if you earnings are more than £4,940pa. Everyone who earns under £13,900 but more than £4,940 is treated as if they earned £13,900.
If you earn more than £43,888pa these earnings do not count towards the S2P. S2P is not available to those who are self-employed as they pay a different class of National Insurance contributions.

Can I build up additional state pension for my S2P if I have not been an employee, for example if I have been a Carer, had a long-term illness or disability?
- Yes. You can build up an additional state pension through S2P for each full tax year you do not work at all, or earn less than the NI Lower Earnings Limit and you meet certain criteria.

How can I find out what my pension is likely to be?
-Contact the Pension Service to obtain a forecast.

Can I top up my state pension?
Yes. Contact the Pension service to find out how much you can add to your state pension.

I do not have a pension and I’m not sure if I should start a Personal pension or a stakeholder pension, what should I do?
-Visit the link below and do your own research. The pension site provides comprehensive information on the different schemes available.

I have heard I can create my own scheme and I would like to start buying property to place in my own self directed fund, what do I need to think about?
-Only commercial property will give you benefits if held in a scheme. Visit the link below for more up to date information.

I have several occupational pension plans from previous employers, what’s the best thing for me to consider?
-Conduct a full review of your pensions, note down all the details from each. If these have been misplaced, call the organisations with whom you worked quoting your NI number and DOB. You may also need to quote your payroll number and ask them to send you details of your pension forecast with them.

My previous employer has gone in to liquidation, how can I find out what has happened with my pension scheme?
-Contact the Pension Tracing Service via the pension service. http://www.thepensionservice.gov.uk/