Group Pension Schemes and Occupational Pensions
A group personal pension (GPP) is a scheme typically set-up by an employer and run by a pension provider, however, unlike an occupational scheme, your pension is a contract between you and the provider.
A GPP it is similar to a personal pension in that, if you are making personal contributions the provider claims tax relief at the basic rate on your net contributions and adds it to your fund. If you are a higher rate taxpayer or an additional rate taxpayer, then you will have to claim the additional rebate through your tax return, where the tax rebate comes in the form of an adjusted tax code, i.e. you pay less income tax. As with an occupationl scheme, if your employer is making and facilitating contributions on your behalf, then the employer will deduct the contribution before decuting tax and full relief is obtained without a need to claim through tax returns.
Features of Group Pension Scheme & Occupational Schemes
– The policyholder will have access to the pension from the age of 55, unless otherwise stated.
– Your employer can contribute to your group scheme. The amount your employer puts into your group pension often depends on how much you’re willing to save. For example, your employer may be prepared to match your contribution on a like-for-like basis up to a certain level, but could be more generous. This is the same with occupational pensions.
– If you are an employee and you leave the firm, you should still be able to make contributions, as the contract is between you and the provider. Whereas, with an occupational scheme your pension will be deferred and you may not be able to make any further contributions to that particular pension scheme. You are of course still entitled to the funds you have built up during your period of employment.
– These schemes can be low cost, due to the bulk buying power of the GPP pool. This is typically the same with occupational pensions.
– As people tend to work with numerous employers over the course of a career, it is commonplace that multiple pension pots can be accumulated in the run up to retirement. This can be messy but it may be the case that these pensions are better placed in one well run scheme, i.e. they can be consolidated into one good pension scheme.
– It is important to emphasise that if your employer is prepared to contribute to your group scheme but you decide to opt out of the pension, you are likely to lose out on their contributions, which is probably not in your best interest.
Want further information?
Perhaps the most important advice I give to my clients is to plan carefully and do not leave things to chance. My job is to help you grow and protect your assets by providing the know-how you need to make informed decisions about your future. I then help you implement the strategy into a reality by working with you over the long term, helping you to build, brick by brick, a successful and robust financial situation.
Get in touch to discuss your Group Pension Scheme or Occupational Pension requirements.