Which way to retirement?

Article Abstract:

UK personal pensions have been criticised in a report by Which magazine which argues that they are too expensive, give poor returns and lack flexibility. Pensions still have advantages such as tax relief for contributions. They are less flexible than personal equity plans (Peps) and income from pensions is taxed while income from Peps is not. The inflexibility of pensions can be an advantage since savings through Peps could be spent before retirement and this temptation does not exist with pensions.

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Top-up options

Article Abstract:

Employees can add to company pension schemes by contributing through Additional Voluntary Contributions (AVCs). They can also use FSAVCs which tend to have higher charges but which offer more portability, flexibility, and privacy. Employees with frequent changes of jobs may be better off with FSAVCs although charges are higher. They may also be useful for employees planning early retirement, and benefits can be taken separately from benefits of main pension schemes.

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It's good to talk

Article Abstract:

UK pension plans sold over the phone tend to be cheaper than other types of plan. They may not always offer enough advice, and buying a pension can bring problems for investors lacking knowledge. Direct pension providers include Marks and Spencer, Equitable Life and Abbey National. Charges can be deducted over the life of the pension, offering better value for early transfers. The choice of fund may be restricted when plans are sold over the phone.

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