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    Pensions

    When planning for retirement the reality is that the earlier you start the better, however, something is better than nothing, so it’s really important that you consider your pension and retirement options.

    It’s never too late to get started.

    Changes to pension rules in recent years also mean that now could be a great time to review your pension provision. You may have multiple pensions from different sources where pension consolidation may be an option. We can advise you on all aspects of your retirement planning so contact us today to find out more.

    What is a state pension?

    A state pension is part of the Government’s pension arrangements. It is a contribution-based benefit and its value depends upon your age and contribution record (National Insurance contributions).

    What is a defined benefit pension scheme?

    A defined benefit pension scheme is one where the amount paid to you is set using a formula based on how many years you’ve worked for your employer and the salary you’ve earned, rather than the value of your investments. These schemes pay out a secure income for life which increases each year. Please see Final Salary Pension for further information regarding defined benefit pension schemes.

    What is a defined contribution pension scheme?

    Defined contribution pensions build up a pension pot using Employer and Employee contributions plus investment returns and tax relief to provide you with an income in retirement. The income you might get at retirement depends on factors including the amount you pay in, the fund’s investment performance and the choices you make at retirement.

    What is a personal pension scheme (PPS)?

    A personal pension scheme (PPS) is a type of defined contribution pensions. You chose the provider and make arrangements for your contributions to be paid. If you have not got a workplace pension, this could be a good way of saving for your retirement.

    What is a self-invested personal pension (SIPP)?

    This is a UK Government approved personal pension scheme which allows you to make your own investment decisions from the full range of investments approved by HM Revenue and Customs. A SIPP is a pension ‘tax wrapper’ allowing tax rebates on contributions in exchange for limits on accessibility.

    What is a QROPS?

    ‘QROPS’ stands for ‘qualifying recognised overseas pension scheme’. A QROPS is an overseas pension scheme that HM Revenue & Customs (HMRC) recognises as eligible to receive transfers from registered pension schemes in the UK.

    What is pension consolidation?

    Consolidating your pension’s means bringing multiple pensions together into a new plan so you can manage your retirement savings in one place. It can, however, be a very complex decision to work out whether you would be better or worse off by combining your pensions. You should take investment advice before making any final decisions on consolidation.

    Defined Benefit Pension Transfers

    WHAT YOU NEED TO KNOW

    The FCA has issued guidance on Defined Benefit Transfers and has stated that when assessing a transfer out of a pension scheme with safeguarded benefits (such as a Final Salary scheme offering a guaranteed income in retirement), a firm should start with the assumption that a transfer will not be suitable.

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