Why do you need a pension?

For many of us retirement is a time to look forward to. Generally we are finishing work at a younger age and we are fitter and more active in retirement than ever before. What's more, on average we are also living longer. This means many of us could spend as long in retirement as we did at work.

To get the most from your retirement, you'll need sufficient income to spend on things you enjoy. Unfortunately, the state pension is unlikely to be enough. That's why more and more people are saving for their retirement through a pension plan.

A pension designed with you in mind

We have learned from talking to customers that they want a pension with:

	clear, straightforward regular statements which show the progress of their pension;
	low charges so their pension can build up more quickly;
	the flexibility to reduce, miss or increase contributions, without paying extra charges, to suit their changing circumstances; and
	everything explained in plain English.

Tony Blair’s Government also recognised the importance of these attributes and stipulated that Stakeholder Pensions must adhere to these principles.

In the first section of this guide we answer some 'frequently asked questions' to give you a brief summary of how the plan works and to help you decide whether or not it is right for you.

In 'your plan in detail' we provide a full explanation of how it all works.

Working together to achieve the right result

One of your most important decisions, apart from whether or not this plan is suitable for you, is how much you should contribute.

You need to take into account the standard of living you want and any other income you expect to have when you retire.

We can provide you with illustrations to show you how much you might need to contribute to achieve the retirement income you want from Abbey National. As part of our service we will send you regular statements. These statements clearly show how your Stakeholder Pension is progressing towards your target. This means we can work together to make sure that you are on track for the retirement income you want.

If the amount you are paying into your plan means you are likely to fall short of your target income, the statement shows how much you need to contribute to get back on track. As a result, you can see where you are at any time although you need to remember that investment returns can rise and fall, so future values are not guaranteed and may be lower than you thought.

Tax advantages

As the state pension is low, the Government wants to encourage people to save for retirement. As a result, they have put in place valuable tax benefits which you will receive when you contribute to your Stakeholder Pension Plan.

	Your contributions will receive tax relief at your highest rate of taxation, this means that the Government also contributes to your pension.
	No other popular way of saving attracts tax relief on all the contributions you make, let alone at your highest tax rate. And, any employer's contributions will also receive tax relief.
	Investment growth is free of Capital Gains Tax and Income Tax (except for UK Dividends).
	And finally, when you reach retirement, which can be as early as age 50, you can take up to a quarter of your final fund as tax-free cash. You will use the rest of your fund to provide a pension income.

The value of tax benefits depends on your personal circumstances and may be changed or withdrawn by the HM Revenue & Customs without warning.

Reassurance that your investment is not lost on your death

If you die before you retire, we can pay the pension fund you have built as a lump sum to your partner or dependants. If you die after you retire, they can continue to receive a pension from your fund.