RM Financial Advice

RM Financial Advice

RM Financial Advice




Pensions are intended as a savings scheme designed to enable you to save for your own retirement. It is widely recognised that the Government will be unable to maintain state pension provision in the long term.

Major medical breakthroughs, and the public's increasing awareness of the benefits of healthy living, mean that people in general are living longer. Therefore, the percentage of people reaching retirement age - and living for perhaps another 20 to 30 years - is rapidly increasing.

National Insurance contributions from today's workers are funding state pensions for today's pensioners. It is therefore inevitable that less and less people will be funding more and more people - an impossible situation. It would seem likely, therefore, that more cuts have to be made in the future.

There are many options available as regards pension planning and, to find the one relevant to your needs, please click on the headings below or contact us for a no obligation discussion.

Personal Pensions

A Personal Pension Plan is a virtually tax-free savings scheme * designed specifically to enable you to save for your retirement. You may save regularly each month or year, and add single contributions whenever you wish. Alternatively, you may just pay one or more single contributions.

Group Personal Pensions

A Group Personal Pension plan works similarly to the Personal Pension, but is administered by the employer. Contributions may be made by the employee, employer or both - within Inland Revenue limits. Personal contributions are deducted - before tax - from the employee's salary, and paid to the pension provider by the employer.

Occupational Schemes

Around half the employed workforce in the UK are currently members of occupational pension schemes. A large number of scheme members are set to receive pensions based on their final salary at, or near to, their retirement age. These schemes (sometimes called 'Defined Benefit' schemes) tend to give a higher and wider range of benefits than other schemes. If you are a member of this type of scheme, you should be receiving documentation annually detailing what your latest expected pension will be at your normal retirement date.


The purpose of an AVC is to secure extra pension. Cash can not normally be taken direct from an AVC. However, there may be special circumstances when AVC benefits can be commuted for cash. Please contact us for further details. AVC's are subject to a maximum funding limit of 15% of remuneration. Members of occupational schemes can purchase extra benefits if they consider that their pension is not going to provide them with enough income during their retirement. All occupational schemes are required to offer these type of arrangements (since 6th April 1988).

Free Standing AVCs

These have been available since 1987. They are separate from the employer's scheme, and often allow greater flexibility and control over pension arrangements, although there may be higher charges because there is no employer subsidy of costs, which is usually a feature of an in house AVC. FSAVCs generally offer more choice over investment and product providers.

Options at Retirement: Phased/Drawdown/ Annuities

The options available to you on retirement have grown significantly over the past few years. It was not long ago that there was virtually no choice, other than deciding whether to purchase an annuity or take a proportion of your pension as tax free cash or not. You may now, in certain circumstances, elect not to receive part of your pension and/or tax free cash. There are a number of reasons why you may wish to do this, a few of which are noted below :-

  1. You are in poor health
  2. You do not need the pension currently
  3. You do not require the benefits the scheme are imposing on you
  4. You require more flexibility

It is virtually impossible to detail all of the advantages of phased retirement and drawdown schemes, as everybody's circumstances differ. Both of these schemes can be very useful indeed, and should in many cases be considered prior to retirement. Please contact us to discuss your individual requirements.


Many company directors, and senior executives, are members of either EPPs or SSASs. Many, however, are not and do not appreciate the advantages these schemes may bring to their pension and tax planning. These schemes, together with SIPPs, can be complex and generally require individual consultation. They can, however, be extremely beneficial. Please contact us in order that we may discuss your requirements and consider your options.


Stakeholder is the new pension that the government introduced from April 2001. It is simple and offers good value to everyone, especially those on low incomes. To be able to call itself 'stakeholder', a pension will have to meet minimum standards on cost, access and terms (the 'CAT standard').

Contributions: the minimum monthly contribution is �20. Those not in employment will be able to contribute up to �3600pa even though they will not be in receipt of 'net relevant earnings'- i.e., will not have to be earning a salary to contribute to a pension. This will widen its appeal, as it will capture a large percentage of the population (such as housewives, people on career breaks etc) who were previously unable to contribute to a pension.

Employer Responsibility: all employers will have to offer access to a stakeholder scheme unless:

  • There are less than 5 employees.
  • A Group Personal Pension Scheme is already available with a 3% employer contribution and no discontinuance penalties and staff are allowed access within 3 months of joining the company.
  • All staff are offered access to an occupational scheme within 1 year of joining.
  • The contracted in money purchase is available for staff after one year

This will be an enormous responsibility for most employers. Even those who are now providing pension schemes for their employees will almost certainly have to make some major changes to what they are currently offering.

The access requirement came into force in October 2001. All employees must be given access within 3 months of joining the company.

The Government's aim is that employees will play a key role in offering this new type of pension to their employees. Their responsibilities will include:

  • Consulting the employees
  • Choosing the appropriate scheme
  • Communicating the benefits of the scheme chosen
  • Advise joiners
  • Set up payroll deductions

Pensions are intended as a long term investment. If you withdraw from these investments in the early years you may not get back the full amount invested. These investments may not be suitable for all recipients please contact us for full advice. Past performance is no guarantee of future returns and the value of units can fall as well as rise. Levels and bases of and reliefs from taxation are subject to change. Note:
*Free from income capital gains taxes on growth within the fund and proceeds to the investor.


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