The right pension for you depends on your age, income, and work situation—whether you’re employed, self-employed, a company director, or in the public sector. Options include occupational pensions, personal pensions, PRSAs, and the new auto-enrolment scheme, My Future Fund.
Because your needs can change over time, it’s important to review your pension regularly. A financial advisor can explain your choices clearly and help you stay on track for the future you want.
How to Manage Your Pension
Managing your pension can feel complicated, but with the right advice and planning, it doesn’t have to be. The approach you take will depend on the type of pension you have, but a financial adviser can guide you through how your contributions are managed and explain the level of flexibility your scheme offers.
How Much Should I Save?
One of the biggest questions people ask about pensions is how much they should be saving. The answer is different for everyone and depends on factors like your age, salary, financial commitments, and the age you plan to retire. Generally, the more you can put aside now, the more financial freedom and comfort you’ll have later in retirement.
Can I Transfer Pensions from Previous Employment?
Over the course of a career, many people end up with more than one pension pot. This might happen if you’ve changed jobs, moved from being self-employed to employed (or vice versa), or set up different retirement funds at different times.
There are several reasons you might consider combining these pensions into one:
- You could reduce fees and charges.
- A larger combined pot may grow more effectively than several smaller ones.
- It can make managing your retirement savings much simpler.
However, transferring pensions isn’t always straightforward. There may be penalties for moving money, and you could lose valuable benefits attached to certain schemes. That’s why it’s essential to seek professional advice before making any decisions. A financial adviser can help you weigh up the pros and cons and make sure you protect your long-term interests.
Finding the Right Pension for Your Future
The following is an overview of the several main types of pensions, however it is important to get personalised pension advice before choosing your pension.
PRSA – Personal Retirement Savings Account
A Personal Retirement Savings Account (PRSA) is a type of personal pension plan. It is an investment account that is designed to let you save for retirement in a flexible way.
You take out a PRSA with a PRSA provider. You can change employment and continue to use the same PRSA and you can switch from one PRSA to another at any time, free of charge.
You can get tax relief for the contributions you pay into your PRSA.
Personal Pensions
If you are self-employed or you have an employer who does not have an occupational pension scheme, you may need to arrange your own pension, called a personal pension or private pension. Personal pensions are managed by a life assurance or investment company.
Most personal pensions policies are insurance policies. Unlike most insurance policies, you can get tax relied on pension contributions.
If you have a personal pension, you do not have to always remain in the same pension fund. You can transfer funds accumulated with one insurer to another fund with another insurer. There may be costs involved in doing this.
Self-Directed Pension
This type of pension is best suited to experienced investors, where it allows greater control, flexibility and independence to choose exactly what the pension is being invested in.
Personal Retirement Bond
A PRB (personal retirement bond) is a simple way to take your retirement fund with you if you decide to change jobs, without having to transfer to your new employer’s scheme. Any growth on your investment is tax free.
Executive PRSA’s
This pension scheme is designed for those working in and running small to medium-sized businesses. They are similar in structure to PRSA’, company directors and owners can access different funds using a version of this type of scheme. Executive pensions are being formally phased out under new regulations, with a final compliance deadline set for April 2026. Due to EU regulations (specifically the IORP II Directive), many long-standing pension arrangements used by directors and small business owners are no longer compliant with new rules.
AVC’s (Additional Voluntary Contributions)
AVCs help you top up your pension fund and can be a really useful way top build up your retirement fund, if you have extra cash to spare or you started saving for your pension late. AVC contributions can be made through your employer or independently and are entitled to tax relief up to a certain limit and investment growth is not taxed.
Company Pensions
A company pension scheme also known as an occupational pension is a pension provided by your employer and is one of the most important employee benefits an employer can provide. Having a company pension scheme is one of the most important employee benefits an employer can provide and in is essential your company gets one that benefits all.
All information and views contained within this article is for informational purposes only and the views expressed do not constitute financial advice. U Consulting makes no representations as to the accuracy, completeness or suitability of any information and will not be liable for any errors, omissions or any losses arising from its use. Please consult a professional financial advisor before making any financial decision.
Nothing presented in the article constitutes investment advice, it does not consider the investment objectives, knowledge and experience or financial situation of any person. You should not act on it in any way and are advised to obtain professional advice suitable to your own individual circumstances. The value of your investment may go down as well as up. You may lose some or all of the money you invest. Past performance should not be taken as an indication or guarantee of future performance; neither should simulated performance. The value of securities may be subject to exchange rate fluctuation that may have a positive or adverse effect on the price or income of such securities.
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Topic – Pensions & Retirement