Investment trusts for your pension

Investment trust pensions can be one of the lowest cost personal pensions available. Other benefits include:

• Charges which are simple to understand.
• Tax relief on your pension payments at the highest rate of tax you pay.
• Tax-efficient gains for your fund.
• The choice of taking up to a quarter of your fund as a tax-free lump sum when you retire.

A few fund management groups offer their own investment trust pensions. You can usually choose to make contributions into one or more of the trusts they manage. Or you can take out a self invested personal pension (SIPP), offered by some investment managers, stockbrokers and financial advisers. SIPPs give you even greater freedom to choose the investments that go into your pension, but this may be at greater cost.

As investment trusts on average give good returns over the long term, they can be a very good choice for funding a pension but it is essential to seek advice on your retirement planning.