Executive Pension

Hi,

I'm an IT Contractor and I have a pension which was recommended by a Financial Advisor. A colleague of mine said that I should start an 'Executive Pension' as it's more tax efficient and more liquid.

Is this true?

Thanks

An Executive Pension is a term used to describe an Occupational Pension Scheme (OPS). It's sometimes also referred to as a Director's Pension.

Are you an employee/director of your own Limited Company? If so, then your financial advisor should have at least discussed the option of an OPS with you.

"...more tax efficient and more liquid..."

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...than what? You don't state what type of pension you have at present. Personal Pension? PRSA?

There are many differences between OPS, Personal Pensions and PRSAs, in terms of maximum levels of allowable contribution and other aspects. However it's too much of a generalisation to say that one is by definition better than the other. This depends on your personal circumstances.

What does your financial advisor say?

WGT said:

I'm an IT Contractor and I have a pension which was recommended by a Financial Advisor.

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What sort of "Financial Advisor"? A tied agent, a multi agency intermediary or an Authorised Advisor?

Are you an employee/director of your own Limited Company? If so, then your financial advisor should have at least discussed the option of an OPS with you.

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Yes I am director of my own limited company. I used to have an account who also gave financial advice as part of the deal, but now he says it's longer part of the deal. Always keep the client happy that's his motto.

What sort of "Financial Advisor"? A tied agent, a multi agency intermediary or an Authorised Advisor?

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Well he was my accountant actually who used to also provide financial advice.

Always keep the client happy that's his motto.

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Strange how he achieves this, by offering a service intially and then not offering it.

So what type of pension plan has he arranged for you?

WGT said:

Well he was my accountant actually who used to also provide financial advice.

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Was he simply recommending a general course of action and leaving it up to you to seek further specialised advice and assistance (e.g. from a suitably qualified/authorised financial intermediary) in relation to selecting and arranging the specific pension plan that suited your needs best? Or was he also selecting and arranging such financial services for you? If it was the latter was he qualified/authorised to do this and what range of financial companies does he deal with?

Was he simply recommending a general course of action and leaving it up to you to seek further specialised advice and assistance (e.g. from a suitably qualified/authorised financial intermediary) in relation to selecting and arranging the specific pension plan that suited your needs best? Or was he also selecting and arranging such financial services for you? If it was the latter was he qualified/authorised to do this and what range of financial companies does he deal with?

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He was an accountant working for a company who offered accountancy services to IT contractors and also Financial advice. I assume (I know that's not always a good idea) that there was a Financial expert also working in the company that he liaised with. In any case a colleague of mine said I should have an execute pension because if for example I have 50K in it and decide to withdraw it, I only have to pay 10K. What I'm wondering is if it's a pension other than an Executive Pension will I be allowed to convert it without suffering financially.

I think he is referring to a 'self directed trust' for flexibility.

On exit at appropriate age, the tax free lump sum is the same I think.
Other extractions are taxed as income.

I think he is referring to a 'self directed trust' for flexibility.

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I was talking to a financial advisor and he said that an investment bond is what you can use to benefit in the short term. But the real benefits taxwise (although Long Term) are to invest in an Executive Pension. Is this 'self directed trust' the same as an investment bond?