A Personal Pension Plan (otherwise known as PPP) is a way of saving for your retirement which is not dependent on your earnings but is instead usually linked to stocks and shares. They are available to any UK resident. You will contribute a set amount of money which is then invested, building up a fund. You can then draw from this fund when you are over the age of 55. One of the great benefits of putting money into a pension is that for every £80 you put in the Government will add £20 up to certain limits. for higher rate taxpayers an additional 20% can be claimed back through your tax return.
In setting up a personal pension you should look for the following features:
- Low charges - many so called stakeholder pension plans have no set up charges and no penalties for transferring in or out
- Some providers now provide online access so you can manage your pension at your discretion.
- Ability to switch investment funds
- Flexibility to stop and start contributions as & when circumstances dictate.
The amount you can expect from your personal pension fund on retirement will depend on a number of factors including the amount you pay in & the performance of the investment funds.