Pensions for DIA members
The DIA Stakeholder Personal Pension Scheme is provided by HJP Independent Financial Advisers Ltd in conjunction with AXA Sun Life.
Choosing a pension is one of the most important financial decisions you will make in your life. You need to know the facts.
Here we provide you with the pension basics - what they are and why you might need one.
It's quite simple: a pension can help towards a comfortable retirement. The basic state single pension is £84.25 a week for the 2006/2007 tax year. Some people may find this is barely enough to pay for food and bills let alone foreign travel, birthday and Christmas presents and all those little extras that make life enjoyable. There are some additional state benefits that might be available to you, for example, pension credit, housing credit, etc.
If you would like to enjoy a similar standard of living in retirement as you do now, you will need to plan for it. A pension plan is one way of helping you do this, and generally, the earlier you start making contributions, the better. Even a short delay can have an impact on the amount you could receive when you retire.
How much do I need to invest?
It's clear that it could be a good move to set up a pension, but how much money will you need to pay in?
This will depend on a number of things - for example, when you want to retire, how old you are now, the income you would like to get after you've retired and, of course, how much you can afford to contribute.
As these kinds of questions are personal to you, AXA have devised a 'What If?' Calculator which can be tailored to your own requirements. It takes account of your current situation and what you want from the future to help you plan your investments.
What if Calculator link:
https://my.axa.co.uk/genesys/aslimpweb?context=whatif
Find out more about AXA:
http://www.axa.co.uk/aboutus/index.html
AXA What if Calculator
The What If? Calculator is an interactive tool that aims to give you a good idea of what you might expect to get from a pension at retirement. It also helps you calculate how much you might need to pay in to get the level of income you want. You will also be able to:
- Target a specific pension and see what contributions could potentially meet this
- See the effects of different amounts of contributions
- Look at the effects of retiring earlier or later than you'd planned
- See how a one-off contribution might help
- Take account of other pensions you may have
- See figures in today's values
- See the effects of delaying
- Include a pension for your spouse
- You tailor the Calculator to meet your needs.
The What if? Calculator tool is for guidance only and the figures shown are estimates and not guaranteed. Your actual retirement income could be more or less than this and will depend on a number of factors.
- How much can I contribute?
- You may contribute and receive tax relief on the higher rate of £3600 a year or 100% of your UK earnings, up to the annual allowance.
- What is the aim of the plan?
- When you retire, the plan will provide you with a pension. You can choose, at retirement, whether to have a higher pension, or a pension commutation lump sum and a reduced pension.
- What age can I start taking a pension?
- Any age from 50 to 75. But the lower age is changing to 55 in April 2010.
- What about tax?
- Tax relief on contributions. When you take your benefits, 25% of your fund can usually be taken as a pension commutation lump sum (the pension income itself is taxed as pension income).
- What are the charges?
- There is an annual fund management charge. It can be no more than 1.5% of fund value for the first 10 years after you start your plan. And no higher than 1% of fund value per year after that. AXA's current charge is 1% per year.
- Which funds can I invest in?
- A wide range of AXA funds plus a limited number of funds managed by other investment fund managers.