R.J.
Nash
Consultancy Ltd
Independent Financial Solutions
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Some employees set up personal pensions of their own. Those who are self employed also do set up personal pensions. In this case, as with Defined Contribution schemes, contributions are set aside in a pension plan and used to purchase an annuity (also known as pension) before the age of 75. One of the great attractions of pension schemes as a vehicle for saving towards retirement is that contributions receive tax relief at your highest marginal rate from the government, although there are contribution limits because of this. There is no other investment you can make which will give you an instant 20% or 40% tax relief depending on the highest rate of tax you pay. Which sounds most appealing, paying tax to the government or saving it for your retirement years?
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