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Private pensions
Get the retirement you want with a personalised pension
- A personalised pension plan, updated regularly
- A dedicated pension adviser as soon as you sign up
- Funds selected impartially from whole of market
What is a private pension?
A private pension is a way to save money for your retirement.Typically you’ll save a small amount each month, or lump sums, with a pension provider and you’ll get tax relief on top – giving your savings pot an extra boost.
Your money will usually be invested in stock market-linked funds, which can fall in value as well as rise. But it also means it has the potential to grow more than it would in a simple cash savings account over the long term.
Money in a pension is locked away until you reach the age of 55 (expected to rise to 57 from 2028). Once you reach 55 you’ll have several options on how you can access it, from taking a combination of regular payments to fund your retirement (including 25% tax free) to using the cash to buy an annuity which will give a regular income for the rest of your life.
What types of pension are available?
Pension saving is a sensible idea at a time when we are living longer and are likely to need more money to fund life in old age. Different types of pensions exist including the State pension in the UK, workplace pensions - sometimes called occupational schemes, which are set up by employers, and also private or personal pensions, which individuals can set up and pay into themselves.
Our partner Profile Pensions offers private pensions. Its service could help you if...
You need help choosing the right pension plan for you
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You have old pensions which you want to consolidate in one place
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You’re looking for greater control over your long-term savings
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You want a dedicated pensions adviser to help with questions
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You want an impartial and whole of market view
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You want clear and transparent investment fees and charges
How much pension do I need to retire?
How much pension you’ll need at retirement will depend on your personal circumstances and how you want your lifestyle to look after you stop working. Will you have paid off your mortgage by the time you retire, or will you be renting? Will you have other sources of income and savings or will you need to rely solely on your pension? Will you want more cash to travel or pursue your hobbies?
The common view in the pensions industry is that your income post-retirement should be between half and two-thirds of your final salary, after tax. But your financial situation is personal to you – you may need more or less depending on your retirement plans.
Many financial advisers recommend you have 10 times your salary saved by age 67. Don't worry if you fall behind or start late though – personal pensions are designed to be flexible. Make sure you've got an accurate idea of your monthly expenses after retirement so you'll know how much you'll need.
Target pension saved by age |
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|---|---|
Age 30 |
1 x salary |
Age 35 |
2 x salary |
Age 40 |
3-4 x salary |
Age 45 |
5-6 x salary |
Age 67 |
10 x salary |
What to consider in pension planning
With so many different pension products on the market it can feel confusing trying to work out the right option for you. Here are some considerations when thinking about pensions:
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Are you in a workplace pension?
If you're employed in the UK, are over the age of 22 and earn over £10,000 a year, then your employer should have automatically enrolled you into their workplace pension scheme. You and your employer both pay into your pension, but you should look at the details of the company scheme and decide on any additional contributions you want to make towards planning for your retirement and how this fits with your other private savings and investments
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How comfortable are you at making financial decisions?
If you’re looking at private pensions and are confident with your finances you might prefer having a more hands-on role with a self-invested personal pension – known as a SIPP. If you're less confident you could consider using a private pension provider. This way you can then choose from a range of funds selected to suit your risk appetite, or the provider can help you pick funds that suit your needs.
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What are your retirement plans?
At what age do you plan to retire? What income will you need – on top of your State pension if you'll have one - to have a comfortable retirement and sustain your lifestyle? When you have an idea of this you can work out how much you’ll need to save - your pension contributions - to achieve your goals. Think about retirement planning in a holistic way, looking at other savings and assets you may have - then you can see how your pension fits into the picture.
What you need to get started
Here’s how to get a personalised pension plan with Profile Pensions:
Get a personalised plan
Complete a questionnaire to understand your attitude to risk
Find old pensions
Get help locating old or lost pension schemes
A bright future with Profile Pensions
We've teamed up with chosen partner Profile Pensions to help you choose the right private pension plan for your needs, using funds from the whole of the market. Profile Pensions can help you combine all of your old pensions into one plan, including any old pensions you ask them to track down, if you decide its right for you. You'll also get your own dedicated pension adviser as soon as you sign up to answer any questions you have.
Capital at risk. This website does not constitute personal advice. If you are in doubt as to the suitability of an investment please contact your Profile Pensions dedicated adviser. Prevailing tax rates and reliefs are dependent on your individual circumstances and are subject to change. MoneySuperMarket.com Ltd is an Introducer Appointed Representative of Profile Pensions, a trading name of Profile Financial Solutions Limited which is authorised and regulated by the Financial Conduct Authority. FCA number 596398. Registered in England & Wales, Company Number 07731925. Registered office address: Norwest Court, Guildhall Street, Preston, PR1 3NU.
How can I withdraw money from a pension fund?
How are pensions taxed?
Can I cash in my private pension?
Once you reach the age of 55 (expected to rise to 57 from 2028) you can begin withdrawing money from your private pension fund. However, keep in mind that the longer you wait, the greater potential for growth and more cash or income in retirement. Early retirement not only gives you less time to save but you’ll also have many more non-working years to fund.
Once you reach retirement and you’re receiving your pension it will be taxed as income (if your total annual income exceeds your personal tax allowance). However, one-off lump sums of up to 25% of your total pension fund are not classed as income and can be withdrawn tax-free.
If you have a flexible access pension and you’re over 55 (expected to rise to 57 from 2028) you can cash in your private pension. However, you will pay tax on any value over your 25% tax free amount. The specific rules are different depending on the type of pension you have, so check with your provider.
Pensions guides
Private Pensions Explained
Thinking about how you'll fund your retirement when you stop working? Private pensions are one option to consider.
Pension Types
Pensions are one of the biggest financial decisions you're likely to make, so you'll want to be sure you're choosing the right one for you. Our guide covers different types of pension and how to pick one to suit your needs
Retirement Planning
If you're planning for the future, you're probably wondering how much you should be saving for your retirement. Our guide can help you navigate the options
Pension contributions
Planning for a comfortable retirement? Our guide covers how much you should contribute to your pension
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