As a carer you may be able to claim a state pension, a non-state pension or both. There are two forms of state pensions – the basic state pension, and the state second pension (which replaced SERPS or the additional state pension).
The non-state pensions include:
- personal pensions,
- stakeholder pensions, or
- company or occupational pensions.
There is no limit on how many pensions you contribute to. You can receive pension payments from both non-state and state pension schemes.
Personal pensions
You do not need to be working to contribute to a personal pension plan. These are privately arranged pensions which are not linked to your employment or earnings and are in addition to your government state pension. Personal pensions are available from banks, building societies, life insurance companies and other financial services companies. You can take out a personal pension at any time between the age of 18 and 75 years. You may wish to consider taking out a personal pension or a stakeholder pension if you:
- are self-employed,
- are not working but can afford to pay for a pension,
- are working but your employer does not offer a company pension scheme,
- do not pay into a company pension,
- are on a moderate income and wish to top up the money you would get from a company pension.
A personal pension may not be best for you if your employer offers an occupational pension scheme, or access to a stakeholder pension scheme.
Stakeholder pensions
Stakeholder pension schemes are similar to personal pension plans in that you do not need to be working to contribute to one. Like personal pensions they are available from banks, building societies, life insurance companies and other financial services companies. Stakeholder pensions offer a greater degree of flexibility, such as allowing you to stop, re-start or change your payments without paying a fee. However, they must meet certain government standards regarding a limit on annual management charges, flexibility and security.
Self-invested personal pensions
A self-invested personal pension (SIPP) is a type of personal pension plan but it has greater flexibility about how your money is invested. A SIPP allows much greater freedom in what to invest in and for the plan to hold these investments directly. You can have a say over the investment strategy or can appoint a fund manager or stockbroker to manage the investments.
Company or occupational pensions
You may have paid into a company or occupational pension if you have worked for someone else. There are two forms of company pension schemes which may be offered by an employer:
- occupational salary-related scheme, or
- occupational defined contribution scheme.
An occupational pension is an independent pension scheme where your employer will make contributions to your pension on top of your regular payments deducted from your salary.
Taking a break from a pension
If you have to reduce your hours or to give up work altogether you should contact your pension provider and discuss how this might affect your pension. It may also be a good idea to seek advice. The Money Advice Service has a list of pension advisers.
