Pensions for the Self Employed

Pensions for the Self Employed

The following options are available to you if you are an individual who is either;

  • Self Employed
  • Working as a Contractor
  • Working in a company that does not provide access to an Occupational Pension Scheme
  • Or you have Pensions from previous employments

Personal Pension Plans (PPPs)

If you are self-employed, working as a contractor or if your employer does not offer an occupational pension a Personal Pension Plan is the product best suited to you.

A Personal Pension is a personally owned pension, held in your name. Unlike a company pension plan, where your employer may make contributions to your pension, only you can make contributions to a personal pension. A Personal Pension Plan allows you to control how much you contribute towards your pension and offers the individual flexibility in relation to Investment Funds, Charges & contributions amounts.

Personal Retirement Savings Account (PRSAs)

This is a more basic and flexible pension product which you can take out, regardless of your employment status. They were introduced by the Government in 2002 with the aim of simplifying and encouraging individuals to start saving for their retirement. Standard PRSAs are regulated by the Pensions Authority. This means there are certain restrictions in relation to charges and Investment Fund Options compared to a Personal Pension Plan.

A PRSA is a personally owned pension that lets you save for retirement on your own terms. You can contribute to it whenever you want and stop making contributions at any time. A PRSA is designed so that every individual, regardless of employment status can start saving for their retirement. You can take out a PRSA if you’re self-employed, a homemaker, or working for a company.

Personal Retirement Bonds (PRBs)

A Personal Retirement Bond is a product that is designed to let you take control of your pension entitlements you left with your previous employment and have accrued a pension benefit with your previous employer. It allows you take control of your Pension as opposed to having your benefits on your behalf by the Trustees designated by your former employer. It allows you to ringfence your benefits without having to transfer your previous employments accumulated pension benefits to your new employer’s scheme. This provides the member with various different advantages in relation to the way the benefits are drawn down and the age that you can access the funds.

When you’ve decided to set up a Personal Retirement Bond, the next step is choosing how best to invest the money you have. You can invest in a range of unit-linked investment funds offerdd by the various different Pension Providers. You will have access to a wide range of various different assets classes, that each carry a varying degree of risk. You will need to find a solution that works best for you and suits your attitude to risk to investing.

When you retire you can decide how you would like to benefit from your PRB. Subject to certain Revenue rules, you may decide to receive part of the benefit as a tax free lump sum. The remainder of your fund can then be invested in an Approved (Minimum) Retirement Fund or an annuity (We heavily recommend that you speak to one of our highly qualified advisors before making any decision to transfer benefits).

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