Money Purchase Plan

This pension plan is set up by your employer to help you save for retirement in a tax-efficient way.

Depending on the scheme rules you and your employer can make payments into the plan.

Payments can be invested in a range of assets and your fund can be used to buy an annuity and/or take tax free cash at the company retirement date.

Why save in a Money Purchase Plan?

• Flexibility - subject to the scheme rules you can make one-off payments to top up your account, and change your regular payments at any time without penalty. Note that charges will continue to be deducted. You can also transfer your plan to another arrangement before you start taking your pension. This can be a complicated decision and therefore you should consider taking financial advice.
• Employer contributions - depending on the scheme both you and your employer can contribute to your plan - potentially boosting your retirement income. See the benefits of employer contributions.

Take action

Read our key features to find out about the Money Purchase Plan

• To start or ask about a Prudential Money Purchase Plan, including your fund options, speak with your employer.
• For more about pensions in general read our pensions guide.
• Tax benefits - saving in a pension is tax efficient*. If you're a basic rate taxpayer for every £100 invested in your pension it only costs you £80 because you will receive tax relief of £0. If you're a higher rate taxpayer it will only cost you £60 because you will receive £40 in tax relief. You are also allowed to take up to 25% of your fund as tax-free cash when you retire. Read about the tax benefits of saving in a pension. Note that pensions in payment are taxed as earned income.
• Invested in a range of funds - trustees of the plan make available a range of funds from which you can choose The range includes unit-linked funds from leading fund managers, as well as the Prudential With-Profits Fund. Note that the value of your fund may fluctuate and you may not get back your original investment.

*This is based on our understanding, as at 6 April 2009, of current taxation, legislation and HM Revenue and practice, all of which are liable to change without notice. The impact of taxation (and any tax relief) depends on individual circumstances.