Pension sort out - old or new

BeefyGrowler

Hi all

I'm getting serious about financing my retirement . I've got two pensions from the past:

• A group pension with Standard Life (through an old job) which has about £4K, 0.64% annual charge, no exit fee. About 5% growth invested in Standards, standard funds

• A stakeholder with Friends Providence (through an old job) which has about £600, 1% annual charge, invested in high risk funds.

I want to start a private pension and was considering starting repaying into the Friends pension, but on reading Martin's article it seems I can get better than a 1%AMC. Looking at saving money perhaps even invest back into the Standard pension or start a new stakeholder pension at a low rate. If I do start a new pension should I transfer the other pensions in for ease of management?

I'm 30 and at this stage I just want to get money way in to a pot for the future and not have to worry about it too much now. With the global economy on a wobble is it advisable to invest in the high risk funds as units can be bought at a lower than average price?

Advice much appreciated.

dunstonh

With the global economy on a wobble is it advisable to invest in the high risk funds as units can be bought at a lower than average price?

It is advisable to invest within your risk profile. Dont try stock picking or second guessing what may or may not happen.

I'm 30 and at this stage I just want to get money way in to a pot for the future and not have to worry about it too much now.

At 30, you are better off getting an IFA in. At your age and IFA can get pensions cheaper than stakeholders arranged on nil commission basis. So, if charges are your focus, then the IFA is the cheapest option. However, investments should be your priority and charges secondary. Depending on how and where you want to invest (and assuming you dont want cheapest but want DIY instead) then you would pick the pension that offers what you are after.

EdInvestor

The Standard Life personal pension is quite a good product with a wide selection of external funds which is what you want (not the inhouse stuff).You will have to pay higher charges to invest in these but the returns are much better so it is worth it.

You could transfer the FP pension into the SL one, and then redeploy the SL money into the external funds, choosing a selection - 4 would be adequate for the money you have already saved.

Fund performance can be checked here:

www.citywire.co.uk/Funds/Home.aspx

You may also like to check your forecast for the 2 state pensions:

www.thepensionservice.gov.uk

Note that the old age tax free allowance is 10k a year (all pensions are taxed).So if you have no access to a company pension scheme, the optimal approach is to "fund the gap" between your projected state pension income and 10k.

For very rough guidance, a fund of 50k might produce a flat-rate pension of around 3k a year, but this wouldn't be index-linked or have spouse benefits. So if you are likely to clock up a state pension of 7k (in today's terms), 50k is what you should save to use up your tax allowance.

BRTs should use tax free stocks and shares ISAs for additional retirement savings.