As the "baby boom" generation quickly approaches retirement age, there are more individuals now than ever before in the history of the United Kingdom that will soon be applying for pension benefits. While this generation has already chosen their pension providers years ago, the younger workforce may be wondering what the principal guidelines are when determining the best pension package to help secure their future. So, it first proves necessary to briefly summarize the three types of pension plans available. Thereafter, we will examine some of the top providers and the individual benefits that each has to offer.
|Company||Minimum Single Investment||Annual Fee||Number of Funds||Minimum Age|
|Aviva||From £5000||From 0.35%||Up to 244||n/a|
|Legal & General||£5,000.00||1%||319||18|
A pension scheme can be broken up into three different categories. A stakeholder pension is the most common and the simplest to manage. The pension provider will invest in a limited amount of securities; the profits accrued thereafter being allocated directly into a retirement package. As the commissions charged are very low, these are also some of the cheapest plans available. Personal pension funds charge higher commissions, but offer the advantage of being invested over a wider range of securities. Thus, the fund is stable and may very well gain more money over a longer period of time in a volatile marketplace. A self-invested personal pension (or SIPP) offers the widest range of investment options; sometimes well over 2,000 individual funds. The main point of all three of these options is to provide the pensioner with financial benefits through capital growth over the duration that he or she will be paying into the plan before reaching retirement age. So, the three types of pension schemes available are:
As the name denotes, Sippdeal specialises in offering their customers a choice of self-invested personal pensions. They offer the largest amount of fund choices amongst their competitors; 6,000 to be precise. Thus, this company gives their customers the choice of exactly how they wish their money to me managed. This company may be the most relevant choice for investors, as they can be seen as an online investment portal as well as a pension provider. There are no annual fees and Sippdeal has been voted the Investor's Chronicle Low Cost SIPP Provider since 2010. So, the main advantages that Sippdeal provides are:
As opposed to Sippdeal, Virgin Money is a stakeholder pension, therefore the simplest type of plan. This package is ideally suited for those who do not possess the knowledge or the time to manage their own investment portfolios. One of the advantages with this type of pension is that due to its simplicity, maintenance charges are characteristically low and there are qualified fund managers who will bring an unsurpassed level expertise managing the plan. Additionally, due to the conservative nature of this scheme, there is less perceived risk than in personally managed pensions. So, some of the main benefits of Virgin Money are:
This SIPP provider offers the customer a choice of over 2,500 funds with a low annual fee of between 0 and .5%. They also offer a loyalty bonus of an additional .5% per year. Due to the fact this this company is another that is heavily involved in self-invested personal pensions, they boast an unparallelled client engagement portal that can be accessed via telephone, internet or smartphone. They also provide valuable research and insight into the most popular investment options. Finally, while the cost is a bit higher than Sippdeal, they have nonetheless been voted the best SIPP provider in the United Kingdom for the past six years. So, the main highlights of Hargreaves and Lansdown are:
So, it is easy to see that there are indeed a wide variety of options to choose from when determining which pension plan represents the most logical option. With a choice between simple, stakeholder pensions and the more fluid self-invested personal pensions, there are numerous packages that are designed to meet virtually every budgetary and financial concern.
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