Understanding the Different Types of Pension

By March 24, 2017Chelmsford
Understanding the Different Types of Pension

Pensions come in all shapes and sizes and with a variety of providers and types it can be confusing to know which one is best suited to your personal circumstances.

Pension saving is a tax-efficient option that needn’t be risky, there are a number of investment options available such as putting your money in cash rather than exposing it to the risks of the stock market. Saving into a pension will help you build an income for your retirement to ensure you have enough money in your later years.

Seeking advice from an independent financial adviser will help you to gain a clearer understanding of the different options available and will ensure that the most effective retirement planning strategies are in place for your personal circumstances.

If you are looking for independent pension advice in Chelmsford and the surrounding areas, we can help you find the right pension adviser to help you plan for your future and provide a good level of income for your retirement.

The financial advisers we recommend are experienced in retirement planning and regularly work with their clients to provide support and guidance on all aspects of pension advice in Chelmsford and across Essex.

What are the Different Types of Pension?

There are many different types of pension available and the one that is best suited to you will depend on several factors, including your employment status, personal circumstances and retirement planning objectives.

It is imperative to seek independent financial advice before entering into a pension to ensure you are making an informed decision. Let’s take a look at some of the most common types of pension schemes available.

Final Salary Pensions

Also called defined benefit schemes, these pensions are largely funded by an employer although employees may also make contributions depending on the rules of the pension. Final salary pensions provide you with a percentage of your final salary before retirement or when you leave the company as an annual income. The percentage can vary from company to company and is usually set by your employer.

Workplace Pension Schemes

With a workplace pension both you and your employer will make monthly contributions into your pension pot, these contributions are then invested by a pension provider until you reach retirement age. Workplace pensions can be trust-based or contract-based.

Stakeholder Pensions

A stakeholder pension is designed to provide an optional lump sum and income for your retirement. Stakeholder pensions are available to UK residents under 75 years of age and can run alongside other workplace pensions. The money you contribute to your stakeholder pension is invested by the pension provider to build a pension pot for your retirement.

Self Invested Personal Pension (SIPPs)

SIPPs offer greater control over your pension without being dependent on any one fund manager or insurance company. As a SIPP requires active management and investment experience they can occur greater management costs.

At Pensions.org we can help you find a registered financial adviser for pension advice in Chelmsford and across Essex. All of the financial advisers we recommend offer bespoke financial advice that is tailored to your unique personal circumstances.


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