imperial Chartered wealth preservation strategies
Get the most from your workplace pensions through retirement planning & wealth preservation strategies from Imperial Chartered Financial Advisers.
There are two types of workplace pension schemes – defined benefit and defined contribution schemes. The type of workplace pension you have will depend on where you work.
From 2012, the government has made some major changes to the way workplace pensions operate. Now all employers have to automatically enrol workers into a workplace pension scheme unless the worker chooses to opt-out.
For most people, staying in a workplace pension is a good idea, particularly as your employer must contribute into it. The contribution your employer makes to your pension is part of your overall employment package. Talk to our independent financial advisers to discuss your wealth preservation strategies.
Defined Contribution Pension
The most common type of automatically enrolled workplace pension is a defined contribution pension which is similar to a personal pension.
There is a minimum total amount that has to be contributed by you, your employer, and the government (in the form of tax relief). As of April 2019, the minimum contributions are 5% from you and 3% from your employer. Your pension pot builds up in line with the contributions you make, investment returns and tax relief.
Defined Benefit Pension
Defined Benefit, also known as a final salary or salary-related pension, the amount you get at retirement is based on:
- how long you have been a member of the pension
- your earnings
When you retire you can take some of your pension as a tax–free cash lump sum. The rest you get as regular income, on which you pay tax.
How this income is worked out varies from scheme to scheme. The pension scheme provider will have information on this.
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