Group Personal Pension

What is a Group Personal Pension?

A Group personal pension is a collection of individual pension plans set up for employees as a group by their employer.

The employee benefits from this form of pension as the charges are often lower than if they set up the plan individually.

Contributions are taken directly from the employee’s salary and paid by the employer to the pension provider where the funds are invested until the employee starts taking their retirement benefits. When that time comes the employee can access those benefits and use them to purchase an income for their retirement.

At a glance

Tax benefits

To encourage savings into a pension, the Government offers generous tax advantages:

  • Contributions benefit from tax relief. So each time there are payments into the plan, the taxman pays in too.
  • If the employee is a higher rate taxpayer they can claim additional tax relief through self-assessment.
  • Savings are allowed to grow in a tax-efficient way.
  • If the employee dies before starting to take their pension, it can be paid as a tax-free lump sum to their family or someone else they nominated.

We’ve based these details on our understanding of current taxation law and practice. They might be affected by any future changes in legislation and your own personal circumstances. If you need more information on tax you should get professional financial advice.

Making contributions

This couldn’t be easier. The employer will deduct regular contributions from the employee’s salary and send them to the pension provider along with any contributions they make on the employee’s behalf. So there is no need to worry about setting up direct debits or sending cheques.

Investing the money

When deciding how to invest in retirement savings employees have two main options. The employer may have chosen an investment option for the employee’s plan with help from their financial adviser. The individual can stick with this option or they can choose their own investments instead.

Investment returns may fluctuate and are not guaranteed. This means that the value of investments can go down as well as up and you may not get back the value of the original investment.

Accessing the pension

The retirement savings an employee has built up through this account will be used to provide you with a regular income. Individuals can start taking your retirement income any time from age 55, even if they’re still working.

Talk to the Group Pension Team at Clifton Wealth where you can choose from a range of options to help tailor your Company pension requirements to best suit the business and your employees’ needs.