Armed with a pension

By THIS IS MONEY
Updated:

 

I have a monthly pension from the armed forces of approximately £400. I want to take out another pension to take me through to retirement in 23 years time. What is the best pension scheme to give me a comfortable living standard and what level of payment would I expect to put in to have an above average pension? DG, Catfield, Norfolk

Jon Minchin, independent financial adviser at Pensionline says: You do not give enough detail about your current position for me to fully answer your question but assuming you are 42 and you started pension planning at 20 or so a contribution of around 10% of your salary should produce a decent pension when you retire.

How you choose to invest that depends on what pension options are available to you assuming you are working (and you must be to contribute to a pension) your options are as follows:

a) join an occupational final salary scheme if your employer offers one. This is the best kind of pension scheme available.

b) If your employer offers a money purchase scheme or a group personal pension scheme into which the employer pays contributions, this is your second best option, because some of your payments are put in by the company.

c) If neither of these apply your only option on the pension fund is a personal pension plan which will give you tax relief on contributions.

From next April you may also be able to apply for a stakeholder pension which will be very flexible but not necessarily a cheaper or a better option because it is limited in the choices of funds in which your contributions can be invested and not appropriate for large contributions. Beyond that a lot decides on what kind of level of risk you want to take and what kind of provisions you have already have made.

You need to see an independent financial adviser who knows about pensions.

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