When Can You Claim Your Pension?
A large factor in whether you can actually depend on your pension relies on when you gain access to it. For those who have not reached state pension age, you won’t be able to rely on a pension because you will still be required to look for work.
In the past, once you reached the state pension age of 60 as a woman and 65 as a man, you were be able to start receiving a pension credit to top up your income without having to look for work.

But now, the state pension age is changing. If you are a woman born on or after 6 April 1950, or a man born on or after 6 April 1959, your state pension age adjusts based on your year of birth. So those born after this date might have to wait until they’re as old as 68 to claim their pension.

Will My Pension Last?
Whether or not you can depend on your pension also has a lot to do with whether it will actually last throughout your retirement. If you have access to full weekly rates (single person: £97.65, married couple: £195.30) then it may actually be something you can depend on.
But whether or not you actually receive the full pension depends on whether you’ve fulfilled the National Insurance (NI) contribution requirements. Also, it depends on how many “qualifying years” you have worked. If you have not worked 30 qualifying years then you won’t receive the full pension.
Knowing whether you can depend on your pension has a lot to do with whether you actually qualify for it based on years worked, age and NI contributions. So take time to explore this information so that you can take the steps to have the most dependable retirement pension possible.

This was a guest post by GoInsuranceRates.com, a site that provides daily updates on the latest auto insurance rates, finance information and more.

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So, why did I borrow from mine? I will tell you.

First, mine is not a 401(K). It is similar and called a TSP Thrift Savings Plan. It is run by the US Government and is one of the largest pension plans in the world.

I wanted to invest in some property and looked at my options. My first option was a home equity line of credit. I have a condo now for about 20 years so I have some equity in it. My credit is good, and it was an easy acceptance from the lender.

The problems were the fees and interest rate.

The interest rate was actually decent but the fees were in the thousands of dollars.

I looked for an alternative and found that I could borrow from myself. So here are the reasons I took out a loan from my pension fund.

1.I had enough money in the fund. I was allowed to borrow 50% or 50,000, whichever was less. I borrowed $50,000.
2.The interest rate was the lowest in town. I borrowed the money on February, 21, 2008 at 3.5%.
3.Simple application. I had to fill out a one-page form and fax it to the TSP office. I could have submitted it electronically and received a check in the mail. But, to get a direct deposit, a signature and a fax was required.
4.Low fees. TSP charges a flat rate of fifty dollars for the loan.
5.Paying it back. This is the beauty in my mind. It is an automatic payroll deduction, with no paperwork, and the money goes right back to my TSP (pension) with the 3.5%. I dont have to think, and I will never be late with a payment.
6.Length of loan. TSP has two types of loans. 15 year and 5 year. The 15 year loan for investing in your primary residence. The 5 year loan is for personal use. I chose the 5 year because my property investment will be overseas in Thailand and will not be my primary residence.

What is the downside?

There are a few items to consider. The money I am using is pre-tax and now I borrowed it. There may be tax implications.

I plan to pay the loan for two of the five years and then retiring. So, what happens to the money that I borrowed and have not paid back? It will now be declared as income unless I pay it back within about 60 days. If I can not pay it back, I will have to count this as taxable income, but, I dont care. I will be retired and my income will be low.

My money is not in the market. True, 50K is now not going up or down. But, about $420 every two weeks, along with my normal investment, will be going back to my TSP. So, it will grow back.

Anyhow, that was what I did. It may not be the solution to your financial issue, but it is something to consider if you have a TSP and need some cash for college, a house, or to pay some bills.

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So first of all what is a stakeholder pension? Well it is not a new kind of pension so to speak, but it is a personal pension which has a set of conditions under which it must operate in order to be called a stakeholder pension. It is not limited to being a personal pension as it can also be a set of conditions which applies to a money purchase occupational scheme.

The purpose of the set of conditions is to make the pension simple, easy and good value for money. So what are the set of conditions that apply to stakeholder pensions then? Well here are the minimum standards that apply to it:

1. The charges must be low at around 1% of the fund invested each year.

2. It must be designed to be simple which is done by having a standard investment option so that you do not have to choose the investments yourself.

3. It must be portable, meaning that you can transfer the stakeholder pension on to a different pension which can be another stakeholder pension or another personal pension. Also if you do this you would not be penalised for transferring it.

4. The pension provider must keep you informed of any changes in the charges you have to pay for it by letting you know one month before the changes take place. They must also send you a statement at least once a year so you are kept up to date with your account.

5. The minimum contribution must be 20 and you must not be obliged to pay in every month unless you wish to do so.

So what are the advantages of a stakeholder pension? The main advantages are that it has low charges, that it has tax advantages, that they are easy to understand and relatively simple, are generally speaking good value for money and that you can transfer it to another pension without incurring any fees.

Are there any disadvantages to it? Well the main disadvantages are that the pension amount you will receive in the future is not predictable, that there is an investment risk and that there is no guarantee that your stakeholder pension will keep pace with price inflation.

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A Simplified Employee Pension (SEP) plan provides a mechanism for the employees to save for their financial needs after the retirement. It also provides the employers with a simplified means of contributing towards the post-retirement financial needs of their employees, and their own, if they are self-employed. In case of a SEP, the contributions are made directly to an Individual Retirement Account (IRA) or an annuity that is created for every individual employee. When the SEP contributions are made into an Individual Retirement Account (IRA), it is collectively referred to as a SEP-IRA. The two terms SEP and SEP-IRA are commonly used interchangeably to denote the same account held by the employee. A Simplified Employee Pension (SEP) plan is a variation of the Individual Retirement Account (IRA). The SEP-IRA is famous because of its simplicity that is also reflected in its name. All employees of an organization are entitled to equal benefits under a SEP plan. SEP accounts are treated as being equivalent to IRA accounts and funds can be invested in a SEP account in the same way as in the case of an IRA. The administration costs of SEP accounts opened by self employed people are close to nothing owing to the simplicity of this retirement plan.

Since SEP plans are tax-deferred investment instruments, the funds saved in a SEP-IRA plan are taxed at the standard income tax rates when an employee makes qualified withdrawals after reaching an age of 591/2. It should be noted that the traditional IRAs are also governed by the same rule. The monetary contributions to a SEP plan are tax-deductible. In other words, the contributions are reduced from the gross taxable income for a particular financial year. This way, the contributions made to SEP-IRA plan help in reducing the income tax liability of a taxpayer during the same financial year. In order to become eligible for the employers SEP-IRA plan, an employee must fulfill the following criteria:

1. The employee must be at least 21 years of age.

2. The employee must have worked for the employer for a minimum of three years in the last five consecutive years.

3. The employee must have earned at least $450 in compensation for that tax year.

Thus we can see that a SEP is nothing but a simplified version of an Individual Retirement Account (IRA) that is established by the employer to help the employees in meeting their financial needs after retirement. The employees must meet certain criteria in order to become eligible for their employers SEP-IRA account. A SEP account entitles all the employees to equal contributions irrespective of their designation within the organization. This plan doesnt differentiate between different employees of an organization since all employees deserve to be equally able to take care of their post-retirement financial needs that are fulfilled by saving regularly in a retirement plan such as a SEP-IRA account provided by the US government. It helps the government in meeting its social obligation of providing a financial cover to the citizens.

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Beth Collingz, PLC International Marketing Director for Pacific Concord Properties Lancaster Brand of Condotels in the Philippines in a Press Conference with International Investors from the United Kingdom held recently at Shangri-La Mactan Resort Hotel in Cebu, reckoned – “Thousands of people in the UK are beginning to catch on”.

A Self Invested Pension Plan [SIPP] is a personal pension plan but with one very significant difference: administration is separate from investment content, giving the plan holder freedom to choose for himself and change the investments within it. The long-awaited rules on what savers can include in their personal pension plans were unveiled in April 2006 by HM Revenue & Customs. The Guidance Notes confirm that the Chancellor is permitting Self Invested Pension Plan [SIPP] holders to invest in hotels such as the Lancaster Brand of Condo Hotels in the Philippines. The only stipulation is that SIPP holders may not stay in their rooms. With more nights available for paying guests, this not surprisingly increases the room owners’ returns. It is estimated there are now more than 70,000 plans holding over 14bn.

A year or so ago, few people in the UK realized that they could manage their Pension Plan portfolios themselves, and even fewer knew that they could invest their SIPP retirement money in homes in the sun which now prove to be among the most popular potential investments to include in a SIPP.

If youre considering using your SIPP to invest in real estate, there are some excellent reasons that you should choose Philippine Condotel Investment real estate to drive your retirement portfolio into high profit margins. The Philippines is ideal for this type of investment because a SIPP can establish title to a property in a country whose legal framework recognizes trusts and a SIPP is simply another form of trust.

Investing in foreign real estate is neither as risky nor as tricky as a lot of people would have you believe. While land and housing prices in the U.K. have soared astronomically in the past decade, the world real estate market is a far different story.

Its still possible to buy a preconstruction Condotel suite at Lancaster The Atrium located in Metro Manila, Philippines, for less than GBP 25,000.00.
Lancaster Manila Atrium Tower A, Shaw Boulevard, Metro Manila, Philippines is a “Full Service” Condominium Hotel ["Condotel"] offering Studio, One, Two and Three Bedroom Suites for sale. To be completed and ready for turnover from
December 2010, the Lancaster Suites Manila Atrium Tower II will provide unit owners with premier residential condo units with the option of enrolling their units in the Lancaster Condotel Rental Pool and earn Rental Incomes [at current purchase levels] of some 12-16% ROI per annum as Owner Non-Residents when not using their units through Condotel Management.

This makes Lancaster Suites one of the Hottest Investment Opportunities in the Philippines. The beauty of holding property in the Philippines is the low cost of property taxes and maintenance. A GBP 25,000 Condotel suite may set you back GBP 100 in property taxes per year, and maintenance costs are similarly low. When you add in the tax-protected status of investments made in your IRA, and the 12-16% returns through rental income through the Condotel advantage, you have an incredible ROI on a purchase of Philippine Condotel investment real estate enthused Collingz.

Whats the downside about owning Philippine Condotel Investment real estate as an SIPP investment? You cannot reside at your investment property as long as the SIPP is titled as the owner of the property. The self directed pension plan rules about benefiting personally from your investments are strict – you are not allowed to make use of any property owned by your SIPP, or you risk losing its tax-protected status and worse yet you could face penalties from HM Customs & Excise. You can, however, rent out your SIPP investment for steady income – putting the profits and cash flow into your SIPP, or sell your Philippine Real Estate Investment for immediate profit, as long as those profits remain inside the SIPP.

If youre looking for an unusual and high earning investment for your SIPP, then take a serious look at owning Philippine Condotel investment real estate. It can help kick your SIPP earnings into high gear.

With the impending slowdown of the UK. housing market and failing pension plans, many investors are turning to using their SIPPs to invest in overseas properties and earn tax-free or tax-deferred income. This creates an outstanding
opportunity for by offering self-directed pension plan vehicle to invest in the Lancaster Suites Atrium Tower pre-construction units.

With preconstruction property appreciating at some 20-30% per annum not only does the Real Estate Appreciation look good but the rental income is in excess of what many Pension Plans offer for the same or similar investment.

Beth Collingz says that many new investors are looking to replace failed pension plans and other future saving schemes with a solid investment in Real Estate. Clients are looking for investments that will give them an income for retirement as an alternative to traditional private pension plans that have failed. Most company pension plans are insufficient as are Government Pensions. Bank rates for Savings accounts are at record lows. Savvy investors are now looking for a more solid investment with potential for monthly income. Condotels in the Philippines fit the bill.

This potential, high rates of rental returns from Condotel Investments, currently from 12% up to 16% per annum, opens up a huge market not traditionally looked at by Real Estate Agents and Brokers whom all so often run around looking for normal residential profile buyers without looking at the by far bigger picture of investments, investing and retirement. “Were here to help our clients, educating our clients and advising them of emerging investment opportunities. Self-Invested Pension Plans and the Lancaster Suites Atrium Condotels, fit this bill exactly; adds Collingz.

Further info regarding Lancaster Philippines Condo Hotel Investments using your UK SIPP [Self-Invested Pension Plan]can be found on the companies website.

Beth Collingz

Director – PLC International Marketing Networks

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Beth Collingz, PLC International Marketing Director for Pacific Concord Properties Lancaster Brand of Condotels in the Philippines in a Press Conference with International Investors from the United Kingdom held recently at Shangri-La Mactan Resort Hotel in Cebu, reckoned – “Thousands of people in the UK are beginning to catch on”

A Self Invested Pension Plan [SIPP] is a personal pension plan but with one very significant difference: administration is separate from investment content, giving the plan holder freedom to choose for himself and change the investments within it. The long-awaited rules on what savers can include in their personal pension plans were unveiled in April 2006 by HM Revenue & Customs. The Guidance Notes confirm that the Chancellor is permitting Self Invested Pension Plan [SIPP] holders to invest in hotels such as the Lancaster Brand of Condo Hotels in the Philippines. The only stipulation is that SIPP holders may not stay in their rooms. With more nights available for paying guests, this not surprisingly increases the room owners’ returns. It is estimated there are now more than 70,000 plans holding over 14bn.

A year or so ago, few people in the UK realized that they could manage their Pension Plan portfolios themselves, and even fewer knew that they could invest their SIPP retirement money in homes in the sun which now prove to be among the most popular potential investments to include in a SIPP

If youre considering using your SIPP to invest in real estate, there are some excellent reasons that you should choose Philippine Condotel Investment real estate to drive your retirement portfolio into high profit margins. The Philippines is ideal for this type of investment because a SIPP can establish title to a property in a country whose legal framework recognizes trusts and a SIPP is simply another form of trust.

Investing in foreign real estate is neither as risky nor as tricky as a lot of people would have you believe. While land and housing prices in the U.K. have soared astronomically in the past decade, the world real estate market is a far different story. Its still possible to buy a preconstruction Condotel suite at Lancaster The Atrium located in Metro Manila, Philippines, for less than GBP 25,000.00

Lancaster Manila Atrium Tower A, Shaw Boulevard, Metro Manila, Philippines is a “Full Service” Condominium Hotel ["Condotel"] offering Studio, One, Two and Three Bedroom Suites for sale. To be completed and ready for turnover from December 2010, the Lancaster Suites Manila Atrium Tower II will provide unit owners with premier residential condo units with the option of enrolling their units in the Lancaster Condotel Rental Pool and earn Rental Incomes [at current purchase levels] of some 8-16% ROI per annum as Owner Non-Residents when not using their units through Condotel Management. This makes Lancaster Suites one of the Hottest Investment Opportunities in the Philippines.

The beauty of holding property in the Philippines is the low cost of property taxes and maintenance. A GBP 25,000 Condotel suite may set you back GBP 100 in property taxes per year, and maintenance costs are similarly low. When you add in the tax-protected status of investments made in your IRA, and the 12-16% returns through rental income through the Condotel advantage, you have an incredible ROI on a purchase of Philippine Condotel investment real estate enthused Collingz.

Whats the downside about owning Philippine Condotel Investment real estate as an SIPP investment? You cannot reside at your investment property as long as the SIPP is titled as the owner of the property. The self directed pension plan rules about benefiting personally from your investments are strict – you are not allowed to make use of any property owned by your SIPP, or you risk losing its tax-protected status and worse yet you could face penalties from HM Customs & Excise. You can, however, rent out your SIPP investment for steady income – putting the profits and cash flow into your SIPP, or sell your Philippine Real Estate Investment for immediate profit, as long as those profits remain inside the SIPP.

If youre looking for an unusual and high earning investment for your SIPP, then take a serious look at owning Philippine Condotel investment real estate. It can help kick your SIPP earnings into high gear.

With the impending slowdown of the UK. housing market and failing pension plans, many investors are turning to using their SIPPs to invest in overseas properties and earn tax-free or tax-deferred income. This creates an outstanding opportunity for by offering self-directed pension plan vehicle to invest in the Lancaster Suites Atrium Tower preconstruction units.

With preconstruction property appreciating at some 20-30% per annum not only does the Real Estate Appreciation look good but the rental income is in excess of what many Pension Plans offer for the same or similar investment.

Beth Collingz says that many new investors are looking to replace failed pension plans and other future saving schemes with a solid investment in Real Estate. Clients are looking for investments that will give them an income for retirement as an alternative to traditional private pension plans that have failed. Most company pension plans are insufficient as are Government Pensions. Bank rates for Savings accounts are at record lows. Savvy investors are now looking for a more solid investment with potential for monthly income. Condotels in the Philippines fit the bill

This potential, high rates of rental returns from Condotel Investments, currently from 8% up to 16% per annum, opens up a huge market not traditionally looked at by Real Estate Agents and Brokers whom all so often run around looking for normal residential profile buyers without looking at the by far bigger picture of investments, investing and retirement. “Were here to help our clients, educating our clients and advising them of emerging investment opportunities. Self-Invested Pension Plans and the Lancaster Suites Atrium Condotels, fit this bill exactly; adds Collingz

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One of the perks being removed from the corporate world is retirement plans as some companies find they can no longer afford to fund them. As executives grow older and their pay plan increases, the amount of money promised to be placed into a pension plan grows along with it. As companies seek ways to reduce expenses this is one of the methods being used.

Some companies will continue to maintain a 401K account for the worker, for instance, but will no longer provide a company contribution. With different industrial sectors having different levels of success, many executives simply accept this change, noting they are thankful to still have their job and paycheck. Even under contracted managers several have been forced to renegotiate their contract and lose the retirement plan benefits in exchange for keeping their job.

Executives may start to rethink their dedication to their employer and one of the options available to them is a home based business. Franchising may being to look attractive as they weigh the loss of their pension plan compared to the risk of opening a franchised business. They may also test the waters by sending their resumes out to other companies that may offer the option of telecommuting.

Working at home can be attractive to some, but others with additional home responsibilities may need the work environment to be productive and lack the appropriate space in their home. Working from home, on the other hand, gives them the opportunity to be more independent in accepting contract positions or a spot at another company that offers telecommuting as an alternative.

Network marketing is a solution many middle managers can investigate as their experience in the business world can help them succeed. Making the adjustment from traditional marketing efforts to networking on the internet can be an easy transition as working a home business may provide the necessary time to learn this new technique.

Becoming a consultant offers numerous job opportunities, especially for a home business and can replace high income careers once the loss of pension plans have been figured into the mix. Additionally, working a home based business can potentially provide the income necessary to make contributions into a private retirement plan. Since the employer contribution was discontinued at the old position, they will not lose additional funding since they were funding their own plan anyhow.

Offering experienced services in success coaching and leadership training, former executives can leave the stress and non-compensatory work for others who may lack the initiative or dedication to thrive in a home based business opportunity. It will take discipline to develop high income jobs on their own, but the opportunities are endless for an experienced professional.

With most pension plans, any contribution made by the employee or employer will become owned by the employee when they leave the company and to avoid any tax penalties most are transferred into private retirement plans which the individual can continue to make annual contributions. The cap on the tax benefits for retirement plan contributions remains the same regardless of how it is funded and if the new business opportunity is lucrative, the maximum contribution can still be made.

Some privately funding pension plans can also include investments in the stock market or other businesses that qualify under Internal Revenue Service Rules, allowing the fund to eventually become self-funded, provided the right investment can be made.

For those who believe their only parachute into retirement will be retirement plans funding by their employer, may find themselves struggling in later years. This struggle however, can be reduced by looking at a business opportunity as a chance to take control over their retirement future and fund their own pension plans.

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There are 3 levels of pensions:

Old Age Security

The most basic level of state pension is the Old Age Security payments. This is available as a monthly payment to most people over the age of 65.

Canada Pension Plan (CPP)

Once you are working in Canada, your paychecks will show deductions for the CPP to a set annual limit (approx $1800) (Quebec has its own system). The amount you pay is based upon 2 limits and your employment type (self or employed). The lower limit is frozen at $3500 and the maximum limit (adjusted every year), currently $40,500 you will only pay a percentage of the income between these limits. If you earn $100,000 a year you will not pay any more into the plan than someone on $50,000 a year. These payments will enable you to receive benefits from the plan should you become disabled or retire and, if you die, to your surviving family members.

RRSP

To encourage Canadians to save for their retirement, the Government has given substantial tax breaks to people who pay into Registered Retirement Savings Plans RRSP. The plans are government sponsored but privately administered with management fees charged by the companies that offer them. All capital gains in the plan are sheltered tax free while the plan is in force. Any cash withdrawn in retirement is declared as income on your annual tax return.

There are annually adjusted limits on the amount you can contribute to your RRSP. These are 18% of your previous years Canadian salary to a maximum of $14500. This is where being an immigrant becomes a pain. Basically, you will not have an allowance for the first calendar year you are living in Canada so any payments you make will be classed as an over contribution. You can get away with a $2000 over contribution, but over that you will be taxed. If your employer pays into a company plan that is a benefit for all the employees you will not be penalized just be careful with any voluntary payments.

There are special rules governing the use of RRSP funds. Some plans are locked in and therefore inaccessible until the plan matures. Most RRSP arent locked in and so are available to be withdrawn before plan maturity though penalties and conditions will apply.

Many couples opt to use a spousal RRSP. If one partner earns substantially more than the other this gives a tax break straight away by giving the higher paid partner some of the other persons allowance. The retirement income is evenly split between the two which will reduce the tax paid.

Normal retirement age is 65 though you can work beyond that. Before age 69 you will have several options for more information go to http://www.onestopimmigration-canada.com/Pensions.html

Before You Leave (For newcomers)

The chances are you will have pension schemes in the country you are leaving either private or state run. This can cause a major headache to sort out.

The first thing to do is to ensure that you have up to date information on all pensions you may be entitled to and these plans have your latest contact details. Most pensions will pay out only if the plan holder contacts THEM. You must ensure you have the contact details and let them know you are moving to Canada.

Check and get written confirmation that the pension plan will pay to a Canadian bank account if not you will have to make alternative arrangements

For state pensions, Canada has social security agreements with many different countries regarding qualifying time for state pensions so check these to see if it helps you.

If you choose to transfer to a Canadian plan, check to see how much it will cost and if there are any additional penalties incurred as it may not be worth it. If it is ensure all the ground work is completed before you leave and you have points of contact to deal with to make it a smooth transfer or someone to sort it out if its not! You cannot open a Canadian Pension until you have a SIN (Social Identification Number) so this cant be done until you have landed.

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It wasnt even two decades ago that you had to worry about your retirement. You went to work, earned your money and lived your life. On payday your pay stub noted the amount of money that went into your pension plan. When it came time to retire, the money you never missed from your paychecks for years should now be coming to you monthly. Its because of this people are looking for business opportunities elsewhere. This is one reason that working at home is becoming so appealing. That, and the thought of not having an income once you are retired is a scary thought. Network marketing, or Multi Level Marketing, is one way around this, by building
yourself a residual income.

Network marketing arrangements are when an individual associates themselves with a company and works independently as a contractor. You are then compensated monetarily based on your product sales or services, whichever is offered, as well as from those whom youve brought into the business.

Multi Level Marketing (MLM) has gotten a bad reputation over the years. There are legitimate ones, but the internet is flooded with illegal ones claiming to be legitimate. It is up to you to research and find a legitimate company before you commit to anything.

Legitimate MLM businesses do not pay you to recruit or sign up other people. There are many online MLM businesses that offer a certain amount of money for each person you sign up, stay away from these ones. These are called pyramid or ponzi schemes, and they are illegal. A legitimate MLM company pays you on the sales of the companies products and or services, and maybe a small amount for your recruits. For it to be legitimate, the bulk of your money comes from your sales.

Finding a good and reliable network marketing business is possible. By putting in some hard work and dedication you can easily build yourself a successful residual home business. Find others that may be in your same situation and together you can help each other build a residual income that will continue to grow with the business. Some companies that you would not think of as a network marketing business are in fact just that. Anytime someone signs up under you and in turn you make a percentage of their earnings is a MLM business.

If it is a legitimate business then work hard and help it expand. MLM type businesses can grow exponentially, which in turn means that your residual income can be limitless. Research is the key, but dont get involved with the ones that require you to purchase a bulk amount of product first. All that will happen is you will be stuck with a garage full of a product you cant sell, a smaller bank account and an angry spouse. If the product is sellable they wouldnt try and pawn it off on you.

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At last, a real life insurance bargain but as always there are strings attached!

If you take out a new pension policy after 6 th April 2006 and within the same premium pay for life insurance cover, then you can use your pension contribution tax allowance to reduce the cost of your life insurance. This means if you’re a standard rate taxpayer, you’ll receive 22% tax relief on your life insurance premiums and relief at 40% if you’re a higher rate taxpayer.

The combined premium you pay for your pension and life insurance will automatically be reduced by 22% by the pension provider. But if you’re a higher rate taxpayer, you’ll need to claim the balance to bring your relief up to 40%, on your year-end self-assessment tax return.

But there are three strings attached:

The pension company must also provide your life insurance and be paid as one combined premium.

The current value of your pension fund plus the sum insured by your life insurance policy must not exceed 1.5 million.

Your combined annual premium for your pension and life insurance must not exceed 215,000.

In practice the savings on your life insurance will not be quite as big as you might otherwise expect. Its because the underlying premium for the life insurance cover will be a bit more expensive than a stand-a-lone policy with the same company and, in all probability, the insurance company providing your pension policy won’t be the cheapest on the life insurance market. Furthermore, you can’t buy a combined pension and life insurance policy online – so you’ll miss out on the Internet’s discounted life insurance prices.

Nevertheless, if you’re a higher rate taxpayer, your tax savings are bound to guarantee that your life cover is a real bargain! If you’re a standard rate taxpayer you’d be wise to do a little homework. Before you buy, you should get an online quote for life insurance to compare against the price you’d pay if you bought it alongside your new pension.

There are some other points you also need to know. Firstly we know you’ll ask whether you can convert your existing life insurance policy into a combined pension purchase. The answer is no! The tax relief is only available if from the outset, you take a pension and life insurance policy as one combined purchase.

Secondly, the life insurance cover can only apply to the owner of the pension policy – you can’t add in anyone else on the life insurance policy. Joint policies aren’t available as a pension/life insurance package.

And whilst many people also add critical illness cover to their life insurance, this is not possible when you have a pension/life insurance package. Critical illness cover pays out a tax-free lump sum if you are diagnosed with a specified serious illness which is listed on your policy. If you want critical illness cover, you’ll have to buy a normal stand-a-lone policy.

Finally, if you’re going to buy a pension life insurance package and replace your existing life cover, a few words of warning. You’ll obviously be older now than when you first took out your existing life insurance policy. This means that the premium rate on your new cover will be higher.

Furthermore, the premium for your new policy could be loaded if you’ve developed any medical conditions since taking out your original life insurance. Remember, even if you’ve simply put on weight, your premium could be loaded. In extreme medical cases, the proposed insurer might even totally refuse to provide life cover. To avoid the possibility of being caught without life insurance cover or being forced to accept a more expensive premium, you should obtain written confirmation from your pension company that they will insure you. You then need to compare their proposed cost, net of tax, with your existing premium.

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