A group personal pension is set up by your employer to provide you with access to a pension. You choose if you want to join the scheme.

Your employer may pay into the scheme as well as you. Your combined payments form your pension fund.

When you retire, you can take up to 25% of the value of your fund as cash - tax free. The rest of your fund is used to provide a regular income.

Pros

• The scheme is set up by your employer, who may make payments to it as well.
• The administration and maintenance of the scheme is done by your employer and the personal pension provider, all you need to do is complete a form, and they will do the rest.
• These schemes normally have quite a wide choice of investment funds and your employer may give you some control over which ones you choose.
• You can take a lump sum at retirement as well as receive an income.
• You can take benefits from the plan from the age of 50 if you reach this age before 6 April 2010 (the minimum age will be 55 from this date).
• Your widow, widower, civil partner or other dependant(s) may receive an income in the event of your death or, if you die before retirement and before age 75, they may get a tax-free lump sum.
•  If you leave the company you can continue to pay into the plan.

Cons

• Your employer may restrict the number of funds so you may have a limited choice of funds to invest in.
• The Group Personal Pension may not be as competitively charged as a Stakeholder plan.

If your company has one of these schemes and your employer is paying into it as well, this may be a good option for you. The administration is handled by your employer and their payments should increase the amount of income you get when you retire.

If your employer is not paying into it you will still get the benefit of them doing the administration but you may want to look at some of the other pension options available as you may get a better deal elsewhere.

Talk to your HR or Line manager, they will know if the company has a group personal pension scheme that you can join. They will also be able to provide you with all the forms and relavant information about the scheme.

Speak to your employer - Talk to your HR or Line manager about your company’s pension arrangements to see if you have this option.

If unsure, get advice – If your company has a scheme but does not make payments to it then you may be better getting an individual personal pension or Stakeholder plan.

Even if they do make payments, once you have the details of the scheme your adviser will be able to tell you if it is a good deal or not.  Some pension schemes carry relatively high charges with them so getting an idea of the cost of your pension is very important.

Act sooner rather than later – There may be only certain times in the year that you can join the scheme, so if you don’t act now then you could miss an opportunity.