Personal pension - what to do with reduced income

auntyi

Thanks for reading this. I've already had a look at the various info regarding pensions, and think I know what to do - but would be grateful for some confirmation please before I make a decision

I have paid premiums into my personal pension since 2004 when I was 42. Before then I was married and made no contributions other than Nat Ins (I have always been self-employed). Once divorced I bought a pension plan. I pay £240/month into this pension.

From next year my income will reduce significantly, and I will find it difficult to pay £240 per month. My pension company has given me 3 options but I don't really understand the advantages/disadvantages of each:

1. Reduce monthly contribution to £80 (I could probably afford that)
2. Take a Premium Holiday
3. Make the plan paid-up

I think option 1 sounds best for me.

Could someone help me out by explaining the pros and cons, or direct me please to a (simple)website, or do I need to speak to an IFA?
Many thanks
I

dunstonh

Could someone help me out by explaining the pros and cons

You are self employed so you are not going to get the full state pensions. Just the basic £4700 when you are age 66. so, any reduction in your retirement provision is going to impact on your retirement income.

2 and 3 are the same thing effectively. Assuming yours is a mono charged stakeholder/personal pension (most are since 2001 although some modern IFA available contracts are not) then it doesnt matter what you call it.