Choosing your own pension AVCs (CORRECTED)
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Your support makes all the difference.CORRECTION (PUBLISHED 14 NOVEMBER 1992) APPENDED TO THIS ARTICLE
ANYONE who wants to boost their pension should consider setting up a supplementary scheme alongside their main pension.
These additional voluntary contribution (AVC) schemes can be run by company schemes or they can be completely separate - free-standing AVCs or FSAVCs.
Personal Pension Management has just launched the first self-invested FSAVC, which means that you can choose unit trusts, investment trusts, money market funds, gilts, shares or commercial property for the fund - or a mixture.
It costs pounds 300 to set up the scheme and then pounds 300 a year. So it is probably not worth setting one up with less than pounds 2,500.
For larger investments there can be a 30 per cent saving over an insurance company's commission- based AVCs, which can consume up to 40 per cent of contributions in administration charges alone.
Unlike regular pensions, AVCs cannot be used to go back to earlier years to boost investment. But many people will be contributing less than the maximum allowed by the Inland Revenue - from 17.5 per cent for those under 36 years old to 40 per cent for those over 61 - and so will be able to pay into an AVC out of current earnings.
Francis Moore, a director at PPM, said: 'Our aim is to put the customer in the driving seat, which will be a welcome relief after the out-dated and often confusing procedures applied by insurance companies.
'Everything is upfront and transparent. There are no hidden charges or complex commission structures. You know exactly where you stand.
'Our product not only frees members of occupational pension schemes from the restrictions of insurance-based FSAVCs but also provides an imaginative solution to the rule that you are only allowed one FSAVC a year, which until now has limited the spread of an individual's investments even further.'
Personal Pension Management is part of Guinness Mahon Benefit Consultants, which is promoting the scheme. Tel: 0722 414888
CORRECTION
An article in 24 October's edition, headed 'Ernst pays pounds 4.6m in Walker case', gave the impression that Ernst & Young had paid the whole sum agreed under the settlement of the case brought against the firm and Alan and William Carr by Walker Greenbank. We are happy to make clear that only a proportion was payable by Ernst & Young.
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