6 Basic Types of UK Pensions

Are you planning to transfer your pension? If so, then you should consider what type of pension you will be transferring. Each type of pension has its own features, pros, and cons. Thus, it is important for you to know the general characteristics of various types of pensions, to help determine if it is prudent to transfer it. Here are some of the most common types of pensions that are available to Britons:

1. Occupational Pensions

Two types of occupational pensions exist:

• Contributory: The pension provider combines your contribution and your employer's contribution

• Non-Contributory: Your employer makes all of the contributions

In both of these cases your employer pays a large percentage of the pension scheme's administrative costs. Furthermore, Inland Revenue provides you with tax benefits. Joining an occupational pension scheme is highly advisable, as it is similar to receiving a pay increase. Furthermore, your account can continue to grow even after you change jobs!

2. Personal Pensions

A Personal Pension is an excellent means to save towards your retirement, and includes substantial tax benefits. In fact, Personal Pensions are typically the best means for Britons to save for their retirements. In particular, the Stakeholder Pension provides the benefits of fewer fees and greater flexibility. Drawbacks of Personal Pensions include the negative impact of yearly charges, and the pension's portfolio performing worse than you had expected it to.

3. SIPPS Pension

The "Self-Invested Personal Pension" is a "do-it-yourself" type of pension that provides you with more control of the investments into your Personal Pension. SIPPs allow you to make various types of investments into the pension pot, including:

• Insurance company funds

• National Savings products

• Residential property

• Shares

• Stocks

• Traded endowment policies

• Unit trusts

4. Stakeholder Pension

This is basically a new type of Personal Pension that the UK government began offering in 2001. The Stakeholder Pension differs from other types of Personal Pensions in that it is significantly more flexible. For most Britons, the State Pension does not provide enough funds for their retirements. Meanwhile, the Stakeholder Pension is quite fair to the customer, and addresses many of the problems of past Personal Pensions, such as overcharging.

5. Basic State Retirement Pension

For 2008-2009, the UK basic state retirement pension is £90.70. Various factors can contribute to how much a person receives. These factors include the Disability Living Allowance, and other amounts. It is important for you to claim all of the benefits for which you are eligible. This could significantly increase the amount of your State Pension. Nevertheless, it is likely that you will still require additional income from sources such as a Personal Pensions, Stakeholder Pensions, and Occupational Pensions.

When considering a uk pension transfer, several factors are involved. Just as it is important to consider these factors, you should also be aware of the various types of UK pensions that exist. Consider each of the aforementioned types of pensions, to ensure that you choose the right pension before you consider transferring it.

It is important to consider various factors before enacting a UK pension transfer. Likewise, you should also consider the various types of UK pensions that are available.