BBC News | Money Reports | How does your pension rate?

BBC News Online: Business: Your Money: Money Reports

Tuesday, November 10, 1998 Published at 14:56 GMT

How does your pension rate?

How does your pension rate?
The long-running pension mis-selling saga has focused on the critical importance of getting pension arrangements right. In a three-part special report, BBC News Online's Ian Hamilton examines the options for people preparing their retirement.

Whatever pension scheme you have or are considering, the key issues about whether it is going to do the right thing by you are cost, flexibility and the level of final benefits.

How does yours rate? Here is a guide to what the better pension schemes offer their members:

Occupational schemes based on a 'final salary' formula:

Flexible retirement age of up to 65

Retirement pension linked to inflation

Pension worth two-thirds of your salary after 40 years of service

Pension based on full earnings including bonuses and overtime, not just basic pay

Ability to take a lump sum at retirement

Full retirement pension if disability forces you out of the workforce early

In case of death, benefits for dependents up to four times annual salary as tax-free lump sum or a pension for partner and dependants.

Money purchase or defined contribution schemes:

Employer as well as employee contributions increasing with age.

A pension fund manager with a long-term record of good performance - with independent measures of performance

Administration charges at least partly paid by the employer

Life assurance and disability insurance paid for by the employer

Penalty-free transfer to a new employer's scheme

The option of early retirement without penalty

Personal pensions:

The flexibility to vary or stop contributions altogether without penalty

A fund manager whose investment performance compares favourably with other funds

Administration charges at least in line with other providers'

Penalty-free early retirement

For a guide to the different types of pensions outlined above, click here.

Relevant Stories

Which pension? (10 Nov 98 | Money Reports)
Path through the pension maze (10 Nov 98 | Money Reports)

In this section

Fighting online fraud
Shares 1999: Time to invest?
What does 1999 hold for investors?
Path through the pension maze
How does your pension rate?
Which pension?
Mortgages made simple
Guide to your tax obligations
Tackling your tax return
Are you saving enough?
New code to protect savers
Guide to cheaper electricity
Guide to the best gas deal
Student debt trap
Business News for early birds
Working Lunch