LMJ is a firm of independent financial advisers specialising in the management of investment portfolios and pensions. We have been helping clients navigate complex financial markets since 2001 and from those very early days, our business has evolved primarily through client recommendations. Read More
Joining your employer's pension scheme. If your employer offers a pension scheme, you should seriously consider joining it.
Your first step should be to find out what your employer offers. There are two main types – final salary and money purchase.
Final Salary Schemes
Also known as a defined benefit pension, this is based on your final salary and every year you've been in the pension scheme.
Typically, an employer may offer you 1/60th of your final salary for every year you've been in the pension scheme.
Your pension will depend on your final earnings and not on stock market conditions over your working life. But these schemes are becoming rarer, and many companies are changing their plans from final-salary related to defined contribution schemes.
When you leave a company you normally have the choice of leaving the money where it is to claim on retirement or transferring it to a new company's occupational scheme or to a personal pension plan. If you leave a firm within two years of joining its pension you can have your own contributions, minus tax relief, returned to you.
This is also known as a money purchase scheme and depending on the scheme's rules you and your employer may also contribute to your fund.
The pension you receive is based on contributions paid, returns on investments, any charges and annuity rates at the time you retire.
On retirement, you do not have to accept the annuity offered by the company running your scheme. You have the right to choose the open market option, in other words, you can shop around for the best rates.
LMJ Financial Management Ltd
Upper South Hall
Bullen Farm Business Centre
Kent, TN12 5LX
Tel: 01732 874111
Fax: 01732 874222
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