Personal pension plans are operated by organisations, such as banks and insurance companies. They enable individuals who are not eligible (or do not wish) to join an occupational pension scheme (e.g. the self employed) to make private pension provision. They are a tax efficient means of saving for retirement. (See money purchase).

New rules introduced in 2001 allow contributions of up to £3,600 to be made without being backed up by earnings, e.g. by house wives/husbands, pensioners up to age 75 and children.

The rules also allow "concurrency", the ability to have a personal pension as well as an occupational pension providing you earn less than £30,000 and you do not exceed the £3,600 limit. This allows personal pensions to be used instead of AVC/FSAVCs in some circumstances.

Click Here to go to the Personal Pension Calculator.