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Pensions Explained

To afford the lifestyle you want when you retire, you need to do something about it today - the buts stop here. It may be tempting to say, "But retirement is a long way off", yet it's never too early to start investing in order to protect your future. To find out more, read our 'Pensions Guide' section by clicking 'Open Guide'. Once you have read that, why not view our 'What is a Pension?' video, presented by Lisa, our online guide.

Pensions guide

Our easy overview introduces you to the basics of pensions, provides information on the products available and gives you helpful hints on things to consider.

There are a number of different types of personal pension, ranging from stakeholder pensions to standard personal pensions to self-invested personal pensions. You should talk to a financial adviser to be certain which one is right for you. Here's a quick rundown of the types of personal pension plans available.

Personal pensions

With a personal pension, you pay money into a pension fund. In some cases, employers who don't offer an occupational scheme may make payments into the personal pensions of employees. These plans are provided by financial institutions with professional fund managers who will invest money on your behalf so that it has the potential to grow in value. Please note the value of your pension fund can go down as well as up and may be worth less than has been paid in. When you retire you can normally take up to 25% of your fund as a tax-free lump sum and use the rest to provide an income. Tax rules may change in the future.

Stakeholder pensions

Stakeholder pensions are personal pensions that have to meet certain minimum standards set by the Government, and have a maximum charge. They are designed to help people with a low income start investing towards their pension.

These plans are provided by financial institutions with professional fund managers who will invest your money to build up a pension fund for you. When you take your benefits you can normally take up to 25% of your fund as a tax-free lump sum and use the rest to provide an income. However, tax rules may change in the future and the value of your pension fund can go down as well as up and may be worth less than has been paid in.

Self invested personal pension

A self invested personal pension (SIPP) could be right for you if you are experienced and confident in making your own investment decisions. It allows you to build up a fund in a tax efficient way and brings with it greater investment choice and flexibility than most personal pensions. With a SIPP, you can choose, and move between, a wide selection of funds and permitted investment types to meet your own investment goals. When you take your benefits you can normally take up to 25% of your fund as a tax-free lump sum and use the rest to provide an income. However, the value of your investment can go down as well as up and the value of the pension fund may be worth less than has been invested. To find out more details and if this is the right choice for you, you need to speak to a financial adviser. Tax rules may change in the future.

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Pension Tracker via MyAviva

Pension Tracker is an exciting way for you to take control of your Aviva pension plan. It's an online service that helps you manage your pension arrangements any time that suits you, much as you can with internet banking.

Let us help you sort out your finances

Again if your response is, "But I don't really understand how to plan my finances better", we're here to help. It's all about getting the information you need to make the right decisions. Our tools and calculators can help you get to grips with your finances and plan for the future.

Pension calculator
See whether you're on track to fund the retirement you want.

What Next?

Now you've learnt more about pensions, you can compare the features of Aviva's pension plans, or apply for your chosen option:

Stakeholder Pension

You can start a Stakeholder Pension plan with as little as £20.

It's a tax-efficient way of investing for your retirement, but bear in mind that you won't have access to the money in your pension fund until you retire.

Find out more about stakeholder pensions

Personal Pension

You can make regular or one-off payments into a Personal Pension plan and stop, restart and change your payments to suit yourself.

It's a tax-efficient way of investing for your retirement, but bear in mind that you won't have access to the money in your pension fund until you retire.

How to apply for a Personal pension

WC03077 07/2014