Barclays Wealth

Company Pensions

Company or occupational pensions are set up by your employer. Like other pensions, these schemes are set up under trust, so the fund is kept separate from the company's assets. This structure is designed to prevent the pension scheme assets from being used by the company or claimed by its creditors if it faces financial uncertainty or liquidation.

Company pensions have three major benefits:

• You gain tax relief at your highest marginal rate on contributions as soon as they are deducted from your payroll
  Whereas personal pensions require you to apply for any additional tax relief via Self Assessment.
• Employer contributions
  Employers who run occupational pension schemes make contributions to the fund on top of those paid by you.
• Extra benefits
  These can include an income for your dependants if you die, and/or life assurance (normally a multiple of salary).

You can top up your company pension by paying into an additional voluntary contribution (AVC) scheme if your employer offers one, or setting up a plan of your own, such as a personal or stakeholder pension.

Types of company pension schemes

• Final salary (defined benefit) schemes
  Your pension is based on an annual multiple of your pay and length of time in the scheme – typically 1/60 of your final salary for every year of service.
• Money purchase (defined contribution) schemes
  Contributions are normally made by you and your employer. The size of your pension pot will depend on how much has been contributed, the performance of the underlying investment funds and how long it's been invested.
• Group personal pension plans
  An employer sets up a number of personal pensions for employees, in order to achieve economies of scale and reduced administration costs. Your employer doesn't have to contribute towards the scheme, but might agree to do so.
• Stakeholder pension schemes
  If your employer has five or more employees, and doesn't offer an occupational or group pension plan to which they contribute at least 3% of your pay, they must offer a workplace stakeholder scheme. Your employer doesn’t have to contribute, but may agree to do so.

Find out more about company pensions

To learn more about how Barclays Wealth could help you, please contact us and we'll be in touch as soon as possible.

Tax treatment will depend on an individual's personal circumstances and may change in the future. Barclays Wealth does not provide tax advice. If in doubt we recommend you obtain your own independent tax and legal advice tailored to your individual circumstances.

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