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IFA meeting next week. Will my IFA do this for me...?
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I'm wondering if private pensions & IFAs is even for me after going on the Aviva website.
I googled Aviva stakeholder & the website sure makes pensions SEEM much simpler than it all has done to me for the past few weeks. Keyword there: SEEM.
So i put in some stats for myself.
£100pm (or £125 with tax relief).
Increase of 3%per year.
Invested 100% in the aviva balanced fund (as stated earlier, i don't know how to select funds, so this was the only fund i felt comfortable selecting).
Churned out these results for me:
I can understand your confusion because if, for example, you were retiring today with 135K in your pot its likely that your annuity,(after taking the 25% lump sum) when taken as 'drawdown' would be closer to 6K. Perhaps some of our resident IFAs could shed some light on this conundrum?0 -
With my meeting tomorrow...
Any key questions i should be asking tomorrow?
Ask the IFA about the drawdown option. Does the scheme in question allow it. The only other advice i can offer is don't sign anything yet because the info provided by Aviva raises more questions than answers.0 -
I just had to google what drawdown meant:Ask the IFA about the drawdown option. Does the scheme in question allow it. The only other advice i can offer is don't sign anything yet because the info provided by Aviva raises more questions than answers.Income Drawdown (also known as an unsecured pension) allows you to take income from your pension fund while the fund remains invested and continues to benefit from any fund growth. You generally need a substantial fund value to take income drawdown. The amount of fund varies according the rules of the pension provider, but is around £100,000.
If this is what you mean then i can't see myself being interested. I want to put money into my pension pot for the full course so that my returns are maximised.
As for the Aviva thing, i don't really have any questions as such. Again, i don't know what to ask. I just felt like going on the Aviva website today to see what a quote would tell me. I filled out their boxes, it told me their answers & i said oh ok then, that's what it says & posted here for you guys to see. That's it really.0 -
If this is what you mean then i can't see myself being interested. I want to put money into my pension pot for the full course so that my returns are maximised.
Suggest you first refer to the annuity Vs drawdown thread on this forum because i think the googled definition is not comprehensive enough for you to make a decision.0 -
As for the Aviva thing, i don't really have any questions as such. Again, i don't know what to ask. I just felt like going on the Aviva website today to see what a quote would tell me. I filled out their boxes, it told me their answers & i said oh ok then, that's what it says & posted here for you guys to see. That's it really.
I personally believe that the Aviva info that you posted is flawed because the methodology is, at best, not transparent. At worst it could well be based on an erroneous premiss. Therefore, its only use would be in comparing one Aviva pension product with another and is of little use for comparing Aviva pensions with another provider's pension. However, this flaw that i refer to is typical to most, if not all, pension fund projections in general, be they from Life Cos or platform providers.0 -
So, i've had the meeting & here's the conclusion for you guys to give me your views:
Whether it be good advice or bad advice (i don't know), this IFA did at least give me advice, unlike the first IFA i spoke to who's approach was more on the lines of "tell us what you want us to do & we'll do it".
The advice was based on:
* I'm on a low wage: £18,000gross pa
* I'm still living at home (therefore no house running costs) & my board is unrealistic of a mortgage/rent (i pay £25/Saturday - so either £100/£125 per month)
* I've £30k in savings. I'm getting married next year. My partner has £10k in savings & we're looking to get a house in 2012/2013.
* NEST is coming in. The original IFA told me 2016/2017, this IFA today seems to think more like 2014 (there's approx 80 employees where i work at a guess).
The advice given was:
* Do not start a private pension now. Wait for NEST & join this. In the meantime, if i have spare cash, i could put into a S&S ISA & "catch up" with the pension (i think he may have said to later put this S&S ISA cash into a pension, but my memory is like a sieve. Sorry). I kept being told NEST is only about 2 years away for me, even when i said i thought it was around 2016. I was told that it's likely going to be moved forward.
* Continue as i am - keep putting money aside for a deposit for a house. I wasn't told to have 3/6 months wages as a 'buffer', but to have £5,000.
* Focus on buying the house & getting everything associated with that complete. Up & running, paying bills & such & see where i stand at the end of all of that.
* On the topic of house buying, i gave 2012/2013 as a time frame. The advice was to go earlier in that timescale rather than later.
And that ladies & gents, with my sieve like memory, is what advice i received today.
- I'm happy i was given SOME advice instead of talking to a fence sitter.
- I can see the logic in his advice
- Yet at the same time, i don't feel comfortable at 28 doing nothing for the next 2/3/4/5 years (WHENEVER this NEST is coming in). I know he said i could go S&S ISA now though, so it technically wouldn't be nothing.
He said that i could ignore this advice if i so wished & we could go ahead with a personal plan now. If i was earning £xx-per year more than what i am, and i was wanting to contribute £500pm or whatever (examples), then he said it would be a different story, but based on still living at home, my low income & low contributions, this is the advice he is giving.
So then, what do you guys think?0 -
So, i've had the meeting & here's the conclusion for you guys to give me your views:
Whether it be good advice or bad advice (i don't know), this IFA did at least give me advice, unlike the first IFA i spoke to who's approach was more on the lines of "tell us what you want us to do & we'll do it".
The advice was based on:
* I'm on a low wage: £18,000gross pa
* I'm still living at home (therefore no house running costs) & my board is unrealistic of a mortgage/rent (i pay £25/Saturday - so either £100/£125 per month)
* I've £30k in savings. I'm getting married next year. My partner has £10k in savings & we're looking to get a house in 2012/2013.
* NEST is coming in. The original IFA told me 2016/2017, this IFA today seems to think more like 2014 (there's approx 80 employees where i work at a guess).
The advice given was:
* Do not start a private pension now. Wait for NEST & join this. In the meantime, if i have spare cash, i could put into a S&S ISA & "catch up" with the pension (i think he may have said to later put this S&S ISA cash into a pension, but my memory is like a sieve. Sorry). I kept being told NEST is only about 2 years away for me, even when i said i thought it was around 2016. I was told that it's likely going to be moved forward.
* Continue as i am - keep putting money aside for a deposit for a house. I wasn't told to have 3/6 months wages as a 'buffer', but to have £5,000.
* Focus on buying the house & getting everything associated with that complete. Up & running, paying bills & such & see where i stand at the end of all of that.
* On the topic of house buying, i gave 2012/2013 as a time frame. The advice was to go earlier in that timescale rather than later.
And that ladies & gents, with my sieve like memory, is what advice i received today.
- I'm happy i was given SOME advice instead of talking to a fence sitter.
- I can see the logic in his advice
- Yet at the same time, i don't feel comfortable at 28 doing nothing for the next 2/3/4/5 years (WHENEVER this NEST is coming in). I know he said i could go S&S ISA now though, so it technically wouldn't be nothing.
He said that i could ignore this advice if i so wished & we could go ahead with a personal plan now. If i was earning £xx-per year more than what i am, and i was wanting to contribute £500pm or whatever (examples), then he said it would be a different story, but based on still living at home, my low income & low contributions, this is the advice he is giving.
So then, what do you guys think?
You've received good advice.0 -
Another plus he gave for the ISAs was one i knew anyway - you can draw the money today if you like, unlike pensions.
While this is nice, it's not so much of a worry to me. I >can< spend big, but i can also save hard if i want. Depends on my wants & needs. I could go barebones if necessary. I may not like it, nobody would LIKE it, but i can do it.
In contrast, my gf would struggle big time.
He told me a story. The exact details i've forgotten, but it was along the lines of an elder chap going in wanting to do a pension. This IFA said that by doing this pension, this chap was "doing down" his state pension. The jist i got was that this punter would be no further forward based on the time he started & his contributions. It'd be wasted money.
Obvious at 28 i may have wasted 10 or so years, but i've still got 40 ahead of me.
Thanks for your view. I do value it. I'd like to see what a few others think as well.
Need to look into S&S ISAs now. Have a thread running there now, so it's time for me to terrorize the boys & girls of that forum for knowledge :rotfl:0 -
The advice sounds good and despite certain people on this board being anti-IFA and accusing us all of being product pushers, it hsows that is not the case in the real world.Yet at the same time, i don't feel comfortable at 28 doing nothing for the next 2/3/4/5 years (WHENEVER this NEST is coming in). I know he said i could go S&S ISA now though, so it technically wouldn't be nothing.
However, I would differ from his opinion on this "potentially". It is an area of opinion. So, not right or wrong. NEST is coming but it may be pushed back again. It will only be a small contribution. Chances are at your age, it wont be enough. The position I have taken with my clients is that they start a pension with level premiums (rather than annually increasing) and will use NEST as the top up when it comes in for them but keep both running. Or alternatively, use S&S ISAs to ensure something is put aside but allows flexibility of movement if something different occurs or comes along. Doing nothing could end up being years wasted.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I am somewhat miffed. I am great fan of "getting your pension sorted out as soon as possible!" plan. But of course, it is entirely up to each individual. I can understand the point behind saving into S&S ISA and then transfer it into a pension when it come. But what if NEST scheme do not allows transfer in?TIt will only be a small contribution. Chances are at your age, it wont be enough.
Indeed, I am in full agreement with that. Let say he is on reasonable salary of £18,000 gross per year by the time he hit NEST in 2016. Happily, the minimum contribution of that is going to be 5% in November 2016. However, it is 5% of the qualifying earnings. And the definition of qualifying earnings is £5,035 to £33,540 in 2008 term. It will be updated in 2012 but let use it for now.
So basically, it is 5% of £12,965. Which is worked out as £647.25 in a year. Of this, you will pay £388.95 in a year and your employer will pay £259.30 in a year. Or as per month, you pay £32.42 and employer pay £21.61 (both figures rounded up).
Of course, it could be less since it is not in 2012 terms, so is it enough?
Cheers
Joe0
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