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Cardwell Management Services UK Limited
Regency House, 45-51 Chorley New Road, Bolton, BL1 4QR
Cardwell Management Services UK Limited
Regency House, 45-51 Chorley New Road, Bolton, BL1 4QR
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What are my pension options?
As a freelancer, your lifestyle will be quite variable. You may end up working abroad and could even retire overseas. You can use your company’s surplus funds to save for your retirement. To do this, simply leave the money in the company by using a corporate savings account. However, growth rates are only likely to keep pace with inflation, and this is far less tax efficient than company
pension contributions. Speak to your Accountant or Financial Adviser to discuss what's best for you.
Executive Pension Plans (EPPs) - Many contractors were paying into an EPP prior to A Day (the date when pension rules changed in
April 2006). EPPs were occupational schemes, set up for people running their own limited company. Their key advantage was that their funding limits were more generous then conventional schemes and there could be an opportunity to take more than 25 per cent tax-free cash (TFC) out of the scheme. These advantages disappeared after A-Day as other schemes can now offer similar
flexibility, however if you would be entitled to more than 25% TFC this option can be protected. If you have such a scheme and are unsure what to do, you should take professional advice.
Self-Invested Personal Pension Plans (SIPPs) - A SIPP is a personal pension with a wide choice of investments. It lets you choose from a wide range of funds and other investments. You can hold individual stocks and shares in a SIPP should you wish.
The SIPP wrapper provides the tax advantages and legal framework for your collection of investments for retirement. What you hold within the SIPP wrapper is up to you. You are able to choose and switch between a wide selection of funds and permitted investment types. With a personal pension you can choose only from a limited selection of investment funds. There are two investment “wrappers” from which to choose;
1. Self-Invested Personal Pension (SIPP) – contributions are based on age-related allowancee
2. Small Self Administered Scheme (SSAS) – the corporate alternative, used by company directors and managers. Works under the same age, salary and length of service rules as the more widely known Executive Pension Plan (EPP)
State pension provisions - In addition to any occupational schemes and personal pension arrangements, you may be able to
benefit from basic pension provisions made by the State, which currently comprise;
1. Basic State pension. The Pension Service (part of the Department for Work and Pensions) will pay your basic State Pension based on your National Insurance record. You may also qualify for the additional State Second Pension based on your earnings and National Insurance contributions
2. State Second Pension (S2P). An additional State Pension on top of your basic State Pension, paid by The Pension Service. This was called SERPS, but since 2002 it is called the State Second Pension. Self-employed people cannot build up a State Second Pension.
See Also
Recommended Links
www.unbiased.co.uk - An Independent Financial Adviser listing website
www.thepensionservice.gov.uk
FSA publications:
HMRC overview of Pensions Tax Simplification: www.hmrc.gov.uk/pensionschemes/pts.htm
pension contributions. Speak to your Accountant or Financial Adviser to discuss what's best for you.
Executive Pension Plans (EPPs) - Many contractors were paying into an EPP prior to A Day (the date when pension rules changed in
April 2006). EPPs were occupational schemes, set up for people running their own limited company. Their key advantage was that their funding limits were more generous then conventional schemes and there could be an opportunity to take more than 25 per cent tax-free cash (TFC) out of the scheme. These advantages disappeared after A-Day as other schemes can now offer similar
flexibility, however if you would be entitled to more than 25% TFC this option can be protected. If you have such a scheme and are unsure what to do, you should take professional advice.
Self-Invested Personal Pension Plans (SIPPs) - A SIPP is a personal pension with a wide choice of investments. It lets you choose from a wide range of funds and other investments. You can hold individual stocks and shares in a SIPP should you wish.
The SIPP wrapper provides the tax advantages and legal framework for your collection of investments for retirement. What you hold within the SIPP wrapper is up to you. You are able to choose and switch between a wide selection of funds and permitted investment types. With a personal pension you can choose only from a limited selection of investment funds. There are two investment “wrappers” from which to choose;
1. Self-Invested Personal Pension (SIPP) – contributions are based on age-related allowancee
2. Small Self Administered Scheme (SSAS) – the corporate alternative, used by company directors and managers. Works under the same age, salary and length of service rules as the more widely known Executive Pension Plan (EPP)
State pension provisions - In addition to any occupational schemes and personal pension arrangements, you may be able to
benefit from basic pension provisions made by the State, which currently comprise;
1. Basic State pension. The Pension Service (part of the Department for Work and Pensions) will pay your basic State Pension based on your National Insurance record. You may also qualify for the additional State Second Pension based on your earnings and National Insurance contributions
2. State Second Pension (S2P). An additional State Pension on top of your basic State Pension, paid by The Pension Service. This was called SERPS, but since 2002 it is called the State Second Pension. Self-employed people cannot build up a State Second Pension.
See Also
Recommended Links
www.unbiased.co.uk - An Independent Financial Adviser listing website
www.thepensionservice.gov.uk
FSA publications:
HMRC overview of Pensions Tax Simplification: www.hmrc.gov.uk/pensionschemes/pts.htm