Looking for some advice for my first pension ?

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TheShadow_2
TheShadow_2 Posts: 100 Forumite
First Anniversary Combo Breaker
in Pensions, annuities & retirement planning
I am currently 19 and I don’t have a pension.The company I work for say they will match what I contribute to a pension so obviously it isn’t making sense for me not having a pension. At present I am currently saving to my Cash ISA Limit and starting to dabble in shares for the shares part of the ISA wrapper.

In your opinion what do you think would be a good start for a pension for a Male Aged 19 who is wanting to pay in for starters £120 (total per month) ?

What type of pension should I go for ?

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  • dunstonh
    dunstonh Posts: 116,371 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
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    What type of pension should I go for ?

    This area of advice is regulated so we cannot be specific. We would fall foul of FSA and board rules.

    Generically, you have stakeholder pensions, personal pensions and SIPPs as the mainstream products available. Each one can have pros and cons.

    With a contribution like that, the SIPP is likely to be the most expensive. You would also be limited as some SIPPs have minimum contribution levels. That would leave stakeholder and personal pensions. A stakeholder pension has a defined low cost charging structure. A Personal pension is identical in how it works but doesnt have that defined low cost charging structure. Providers can have a charging structure of their choice. This doesnt mean personal pensions are more expensive. Some are, some are not. Personal pensions also tend to have much better fund ranges.

    If you are going to protect your pension contributions using waiver of premium (WOP/WOC), then you should also be aware that not all these are the same. Some are quite poor, some are very good. The differences can be enough to rule out some providers and look at others.

    If you want increasing contributions (such as RPI, NAEI or fixed %), then again, not all providers offer this and that can influence the final choice.

    Finally, fund selection. The most important thing. More than charges. No point being in a cheap pension with rubbish funds.
    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.
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
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    If you want to invest your pension in shares, you'll need to get a SIPP, as the others only allow funds.

    Make sure you get a low cost online one with no annual fee.If you did this you would probably also need to let a few contributions mount up in the cash account (where they earn interest) before buying the shares, otherwise the charges would not be economic.

    What would the total amount be ( your cont + company's + tax relief) per month?

    An ETF ( tracker fund but the same as a share) is another good spot to park money as you don't have to pay stamp duty.Some brokers don't even charge commission when you buy ETFs.
    Trying to keep it simple...;)
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