Pension FAQ

Pension is a must for people who retire from their job to keep getting money to live a decent life style even after the salary stops. However, you will require making a contribution towards pension schemes from your monthly salary. There are many questions that may pop up in your mind when you start thinking about pension. Mentioned below are answers to some of the frequently asked questions:

  • What is basic state pension after retirement?
    Many of the working people are entitled for state basic pension plans. The pension is given to the people in return to their contribution that they have made towards National Insurance when they were working. The eligible age for a person to get state pension is 65 years for men and 60 years for women which will increase to 65 years for women who retire in between 2010-12 and the age for men will be 68 years.
  • What is SERPS or State Earnings Related Pension Scheme?
    The SERPS is a scheme in which all the employees ahd to make some contribution as an additional state pension scheme between year 1978-88. It was possible to opt out of this state pension program after year 1988 and after 2002 they replaced it with state second pension. The idea was to provide the people with money equal to 25% of their total earnings in the best 20 years of their working life. However, they later reduced the percent to 20 which was now averaged over the entire working life of the individual.
  • What is State Second Pension?
    The State Second Pension was introduced in 2002 in place of SERPS and is very much similar to it except that it has more benefits especially for the people whose earning is very low.
  • What are stakeholder pensions?
    Stakeholder pension was introduced in the year 2001 and was aimed to make the pension scheme still cheaper and all the more accessible. One can take out this pension amount directly or with the help of employer. The least investment required is £20 and in addition to it they do not have any penalties or charges if you stop making payment to the scheme. No charges are there if you like to transfer the money to any other pension scheme. The pension that you will receive will depend on the amount of money in your pension fund and the rate of annuity at the time you retire.