Investing in proper pension plans can reap good benefits in the future. Choosing the right plan can be difficult and confusing as every person has different needs and financial situations to deal with in life. Below are some of the best pension plans available in the UK to choose from. It is important to understand and know about these plans prior investing in them.
- Basic State pension – Age limit for this plan is above 65 years for men and above 60 years of age for women. It is a very common and simple pension plan and its contribution depends on the amount of National Insurance Contribution. It is applicable to most of the people working in the UK.
- State Second Pension (S2P) – Earlier it was called State Earning Related Pension Scheme (SERPS) in the UK. This plan is applicable only if the person is actively paying National Insurance Contributions. Before it used to be calculated on 25% of the entire salary of the individual during his best years, but now it is revised and lowered to 20%. Eligibility criteria are the same as that of State Pension Plan.
- Occupational Pension – This plan is applicable to all working people as it is provided by the employer to his employees. In this plan the employer will make contribution on the employees’ behalf whereas, a regular equivalent sum is deducted from his salary every month.
- Stakeholder Pension – This plan is devised mainly for people who are self-employed. This is a very beneficial plan as it runs low on charges and gives good returns post retirement. The annual charges for this plan are limited and moreover, there are no penalties on transferring the funds from one plan to another plan. Best part is the pension provider cannot charge the individual even if he fails or stops paying in for any reason.
- Self Invested Personal Pension (SIPP) - It is a very flexible plan and comes with different options for pension holder. Pension holder can invest in huge amounts and control his choices of investment within the plan conveniently. He can invest in shares and funds, commercial or resident property, investment funds to get better returns when desired.
If one still gets confused about making the right choice he can any time go for free pension reviews and take an expert advice on choosing the best pension plan for better benefits in the future.