maximilien
Apprentice
Joined: 12 Oct 2006
Posts: 3
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 Posted: 05/29/08 - 03:39 Post subject: |
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Personal pension is a type of fund where you pay monthly or a lump sum to the bank, insurance company or other financial institution which is your pension provider. It invests your money, and when the conditions are fulfilled, according to your contribution you get the pension. Amount of the contributions determine your pension. You are allowed to take 25 percent of your pension savings when conditions for retirement are impregnate. This sum is tax-free. If your pension savings didn't reach more then a total amount of 15000 pounds (from all sources) you have a right to take a whole sum with 25 percent tax-free charge. This limit is rising in time so in a couple of years it will reach a couple of thousands larger sum. If your option is the first one, you can also use the rest of the money in fund in a following ways. The one is to buy an annuity, which means that you would have a regular income per year as long as you live, and you can consult life insurance company to get familiar with their offers. It doesn't have to be the one that provided your pension. The other way is to just take an income from the remainder of your fund, but it would be taxed. If your total savings are larger then your lifetime allowance you can do two things with this sum: take it as a lump sum with a tax rate of 55 percent or as an income with a tax rate of 25 percent.
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