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Are pension schemes the best way to save for retirement?

Pension schemes are widely available and generally we are told to start saving early to achieve a suitable retirement fund at the age you want it.  However, with the withdrawal of the higher rate tax relief on pension contributions for some, are pensions still the best way to save for retirement?

Tax benefits such as income tax relief on contributions into a pension scheme, tax efficient growth within the scheme and a tax-free lump sum on retirement are the key benefits the Government provide to encourage us to make our own provisions.  These benefits will still be in place but with the withdrawal of higher rate tax relief on some pension contributions, the complicated new anti-forestalling provisions and the introduction of the 50% tax rate from April 2010, are they still enough of a benefit to make your pension work for you?

There are other options that make viable alternatives to the basic pension scheme, such as Individual Savings Accounts (ISA’s), Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) investments.

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