Understanding Group Pensions
Group Personal Pensions (GPP) are a series of individual pensions offered by one life insurance company. Though GPPs cost scheme members more to operate they have less regulations and lower administration costs than a final salary scheme.
Both employer and employee can contribute to a group pension – though they will be subject to a lifetime and annual allowance. The policyholder contributes to the plan and the money is invested to build up a fund.
The amount of pension payable when the policyholder retires will depend on several factors including:
- How much has been paid into the scheme
- How well investment funds perform
- What the annuity rate is at the date of retirement – this is used to convert the fund amount into a pension
For free impartial advice on choosing group pensions or to find out more about the benefits of this type of pension scheme please contact us today to speak with one of our strategic partners.
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