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.
What is contracting out?
The government lets you opt out of the State Second Pension and this is known as 'contracting out.'
If you contract out, your National Insurance contributions are paid into your personal or stakeholder pension instead of going towards your entitlement to the State Second Pension. This means the benefits you get from your personal or stakeholder pension replace the benefits you've given up in the State Second Pension.
Part of your National Insurance contributions, known as rebates, will qualify for tax relief. The government will add this to the payment they make into your plan.
When you contract out, you won't be entitled to the full State Second Pension, but you may still get part of it if there's a time in your working life that you're not contracted out.
From 6 April 2012 you will no longer be able to contract out on a personal pension, stakeholder pension, or workplace defined contribution scheme. This means that for the 2012/13 tax year, you can no longer have rebates paid to these plans and you will automatically build up benefits under the State Second Pension instead. Any National Insurance rebates already paid into these plans from earlier tax years will be unaffected and remain invested in them.
There are lots of things you need to think about before you decide to contract out, so it's best to get financial advice so you make the right decision.
- What is a pension?
- Why have a pension?
- How do I fund my retirement?
- Personal pensions
- What are funds?
- What can I do with my funds?
- What happens if I change jobs?
- What if my marital status changes?
- Can I retire early?
- Company pensions
- What about the state pension?
- So what's the state second pension?
- What are pension credits?
- Can I get a state pension forecast?
- Action plan
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Learn more with the 'What is a pension?' video
In this unique video guide, Lisa helps you to fully understand what a pension is all about. Please remember that this is based on our current understanding of pension rules which may change in the future.
As a pension plan is a long term investment, you need to be aware that the value of your investment can go down as well as up and the value of your/the pension fund may be worth less than has been invested.
Non-javascript users or those with slow connections can view the full transcript here (PDF 30KB).
Pension Tracker via My Account
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.
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.
WC03077 05/2012
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© 2012 Aviva
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