Understanding how pensions can be ethical requires thinking of them as more than just long term savings.
A pension is a tax efficient ‘wrapper’ which, contains your choice of investments, intended to grow and provide your income in retirement.
Other common wrappers include ISAs, General Investment Accounts etc. but a pension offers some unique benefits.
When you pay money in, HMRC puts some in too (depending on your rate of Tax) and over the years you benefit from the growth on this. If a company pays in, it gets tax relief.
When the time comes for you to retire, you can typically take 25% of the value of your fund as a Tax Free lump sum. The rest is used to generate an income (or you can use it all to generate a potentially larger income).
Ethical Pensions – Make your SIPP Ethical
When you understand that a pension or SIPP is just a ‘wrapper’ around your choice of investments it makes it much easier to see how to make them ethical.
You choose the underlying ethical investments and they are placed into your pension or SIPP or a company scheme.
If you already have a pension it may be possible to transfer your fund into ethical investments either within your existing pension (you may need to contact your current provider) or a new pension with more ethical choices.
Regardless of whether you have an existing pension or would like to start a new ethical SIPP or company pension scheme, we can help with that.
How Important is Your Pension?
Very! Your pension will be used to provide an income when you are no longer working (or can’t), it will be vital for your lifestyle and quality of life as a pensioner.
It is therefore extremely important for your pension fund to generate positive returns which target both your anticipated retirement age and your projected future income needs.
Careful planning and expert advice can contribute greatly towards achieving your desired outcome.
Get in touch today to start planning your ethical pension journey