PLANNING FOR RETIREMENT — THE OPTIONS
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• State pensions are payable to everyone with enough NI contributions. The current maximum rate is £97.65 for a single person and £156.15 for a couple. This money is taxable and the amount you actually receive is based on the number of years you have made NI contributions,
• Workers without an occupational scheme may receive government pension credits. These award a maximum rate (including the pension) of £132.60 for a single person and £202.40 for a couple. Pension credits aim to provide a minimum living standard and wit be reduced or not paid if you continue to work or if you have a private pension.
• It may also be possible to claim housing benefit and for help with council tax.
• The Rolls-Royce of private pensions is the final salary scheme. This is still available for 3.5 million public sector workers but is becoming increasingly rare in the private sector. Final salary schemes are where you and your employer pay into a fund and on retirement you receive a percentage of you final salary based on the number of years you have contributed.
• More common now are defined contribution schemes where you build up a pot, usually by taking out an insurance policy. This is paid out annually or as a lump sum on retirement. The amount you receive is based on the amount put in, not on your final salary. You can receive tax relief on your contributions to such schemes.
• You can take early retirement with private pension schemes, but the amount you receive is likely to be considerably reduced.
• It is law for all over the age of 75 to use any pension savings to buy an annuity to provide them with an income for the rest of their lives. This 'equirement is likely to be scrapped by the new coalition government. Useful contacts: to find out more about state pensions visit www. directgov.uk You can also get a pension forecast to find out the amount of state pension you will get at www.directgov.uk/en/Dioll/DottOnlinel DG_4017967