Pensions have provided a source of much
news coverage in the last year. It is clear that fewer
people in the future will have access to ‘defined
benefit’ pensions related to the number of years
that they work for a firm and their final salary.
In future clients will have more choice over their
pension contributions and from April 6th 2006, ‘A’
day, the rules determining how much can be contributed
to a pension plan on an annual basis became much less
restrictive.
Self Invested Personal Pension Plans
Many high earners will find the option
of having more control over their pension funds highly
attractive. A wrapper known as a Self Invested Personal
Pension provides an ideal vehicle for those who would
like control and flexibility over their pension investment.
Full Concurrency
Since April 6th 2006 employed people
with high earnings will be able to make contributions
to their own Personal Pension Scheme. This means that
they will be able to build up benefits outside the
main scheme provided that these contributions do not
take then over the lifetime allowance (£1.6million
in 2007). This has opened up an exciting area for
high earning individuals who will not be eligible
for full benefits from their scheme and who have previously
suffered from the earnings cap. Self Invested Personal
Pensions are likely to be particularly appropriate
in these circumstances.
