Company Pensions - Overview
Depending on who you work for you will typically find one of the following types of schemes (some companies will have both)
Final Salary Schemes
Where the employer will provide the employee with a pension based on their final salary at retirement and their length of service. With these types of schemes the pension is often inflation protected in some way e.g. linked to retail price inflation. With final salary schemes the risk is on the employer to ensure that the pension assets will cover the pension payments required.
Money Purchase Schemes
This is where the employee pays a proportion of salary into a pension scheme with usually a contribution also made by the employer. The final pension pot available to the employee at retirement will depend on the investment performance of the pension scheme. In this respect the employee bears the risk that if investment returns are not as good as expected then this will impact on the fund size at retirement. In addition to this the income that can be achieved by using the fund to buy an annuity will be affected by prevailing interest rates and life expectancy rates.
Company Pension Advice Service
Are you unsure of the best way to plan for your Retirement?
Across the market there are a number of national firms of pension specialists who can offer:
Pension Advice