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Personal Pension Plans were introduced in 1988 by Margaret Thatcher's
Government, as an encouragement for individuals to save on their own behalf.
It was already clear at that point that the State would not be able to
support the ageing population and we were all encouraged to arrange our
own personal funds for the future.
Personal Pension Plans were intended to be "all-singing, all-dancing"
plans, which could accept transfers from old Company Pension Schemes which
were, at the time, perceived to be frozen and, therefore, bad value for
money.
There has been much controversy in the area of Personal Pension
Transfers, although in certain instances they are still the best way
forward for some individuals. In the late 1980's and early 1990's there
were numerous advisers suggesting these transfers without proper
reference to the risks involved. Thankfully now advisers must carry a
special qualification to give an opinion on this subject. Charlwood Leigh
has a fully qualified adviser for you to use.
Charlwood Leigh is happy to investigate your past pensions and also
to help you build new Personal Pensions for the future. We offer a
large range of companies, ranging from those which invest money in low
risk funds, to those which provide links to unit trusts through pension
schemes, giving our clients the opportunity of making better growth over
reasonable terms of years. If you are not sure about whether your pension
is adequate, why not
contact us
to find out.
Are you putting enough into your pension to enable you to have the
retirement you expect?
As a rough indication, take a look at the following two charts courtesy
of Standard Life. Click on the images for enlargement.
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For a pension of 50% of final Salary. |
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Monetary contributions per month
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Contribution rate per annum
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Contributions to Personal Pensions are limited by the Government,
depending on your earned income in any tax year. It is important to
calculate these limits properly to ensure that you get the best possible
tax reliefs available - please see table below. Charlwood Leigh can assist
you in doing this.
Maximum Contributions from your Earnings before Tax
| Personal Pension Plans |
| Age at the beginning of
tax year of assessment |
Maximum percentage of
net relevant earnings |
| Up to 35 |
17.5% |
| 36 to 45 |
20% |
| 46 to 50 |
25% |
| 51 to 55 |
30% |
| 56 to 60 |
35% |
| 61 or over |
40% |
Worth noting:
The limit applies to all your personal pension contributions (including any contributions to Retirement Annuities), a point to note if you have more than one plan. If your employer contributes to your plan, the total of your and your employer's contributions must fall within the limit. An earnings cap limits your net relevant earnings (an Inland Revenue expression meaning your gross earned income against which you can make personal pension contributions),
and this is £99,000 pa. for the 2003/2004 tax year.
Since April 2001, it has been possible to select any one of the five previous tax years as a basis for calculating maximum contributions to personal pensions.
| Retirement Annuities |
| Age at the beginning of
tax year of assessment |
Maximum percentage of
net relevant earnings |
| Up to 35 |
17.5% |
| 36 to 45 |
17.5% |
| 46 to 50 |
17.5% |
| 51 to 55 |
20% |
| 56 to 60 |
22.5% |
| 61 or over |
27.5% |
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