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Why should I take responsibility for my retirement planning?

It’s important that you take control of the amount of money you will have once you retire. The Government pension income that may be available to you at retirement is likely to be minimal, and hardly enough for a comfortable retirement. Employer “final salary” pensions that previous generations may have enjoyed are very rare these days. The cost of living is likely to carry on increasing.

Life expectancy is also on the rise, and for many of us who may live into our nineties, retirement could well extend over a 30 year period. For all these reasons, it is important to be financially well prepared. And the only way of being sure of this, is to take control and start saving for retirement.

What are the key points to consider when thinking about starting a pension?

How much can I afford to save?
Do I want to save monthly, quarterly, annually or make single premium contributions?
How much tax relief will I benefit from?
What may be my ideal retirement age and how many years do I have left to save over?
Do I have any existing pensions and would I like to review them to see if I can consolidate them by transferring them into this plan?
Do I want to engage a financial adviser to provide me with pension and investment advice or do I want my pension savings invested into a ready-made investment portfolio?
What are the fees to start up a personal pension plan?
What are my options at retirement age?
Who do I wish to appoint as beneficiary(ies) in the event of my death?

How old do I have to be to start my own pension?

You can apply for the Prosperity Personal Pension Plan as from age 18.

At what age can I start taking my pension benefits?

You can take your pension benefits as from 55. You must have started taking them before age 75.

What happens to my pension fund when I die?

In the event of your death the full value of your pension fund will be paid to your nominated beneficiaries. This can be as a tax-free lump sum or as pension income.

Can I transfer a UK registered pension into the Prosperity Personal Pension Plan?

No, a UK registered pension can only be transferred into a QROPS. You may be eligible to transfer a UK pension into our Prosperity QROPS instead.

Are my pension investments taxed?

No, your pension investments will grow in a tax free environment.

Will my pension benefits be taxed when I retire?

As from age 55 you may take out all your pension benefits as a tax free lump sum. You can opt to take an income as from age 55 that may be subject to income tax until you reach the age of 60, when it will cease to be taxed.

Why is it important to consider the impact of inflation on my pension fund?

Pensions are a long term investment. The cost of living can increase substantially over the long term. Your pension fund should be invested in an environment that has the potential to produce a return above the rate of inflation by the time you retire. Otherwise, your real purchasing power will have fallen and your pension will not be able to buy you as much as you were aiming for.

What happens if I can no longer afford to keep paying my contributions?

You can reduce your contributions to a minimum of £100 per month or you can stop paying them altogether. You can then restart them at a later date once it becomes affordable to you. If you stop your contributions, the value of the pension fund that you have already built up will remain invested until you are at least age 55.

Can I access my pension benefits before age 55?

No, not in normal circumstances. However, pension benefits may be accessible before the age of 55 in the event of severe ill health. Medical evidence from a registered general practitioner will be required.

How often should I review my pension fund value?

You can review your pension as often as you like. We recommend you review it at least once a year to ensure you keep on track of your retirement goals. We will send you an annual statement to keep you informed. We also recommend you review it each time your personal circumstances change or your salary increases as you may also wish to increase your contributions accordingly.

What do I need to do if I need to amend my contributions?

All you have to do is contact us and let us know in writing if you wish to stop or change the amount you contribute and how much you wish to contribute going forward. You can also let us know via email as long as it is sent from the email address you have registered with us.

Is it really worth getting a pension when I am 18 and have just began working life?

Yes, the more years you have to invest, the more regular contributions you will have time to make and the higher the potential growth your pension pot may receive due to compounded returns over more years. This can make a significant difference over the long term and may mean you can retire sooner! Use our pension calculator to check this out.

Can my employer also pay into my pension?

Yes, your employer can make direct payments into your personal pension scheme.

Can I take out a workplace pension for my employees?

Yes, occupational pension schemes are offered by Abacus and can be arranged.

I have a pension in Gibraltar with another provider but I am not happy with the level of returns or fees. Can I transfer my pension to you?

Yes, pension transfers are accepted into the Prosperity Personal Pension scheme. A 0.75% transfer in fee (capped at £1,500) applies to all transfers in.

Further questions? Contact:

Erica Power

CeMap
Expert in Pension Administration
pension.services@abacus.gi
Tel: +00350 200 78777 ext 385

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Abacus Gibraltar