pensions

postingalwaysposting

help lol, i am 19 and want to open a stake holders pension, i have been looking a different companys and dont get all the technical information etc that is written on the sites.

please can someone explain to me:
1) what it means about a certain amount of money allowed to be placed in it each year?
2) does it have to be with your current bank supplier?
3) will the pension still be mine if/when i get married as i will have a different last name?
4) does your employer need to know if you are going to have one of these?
5) what is a stakeholder with-profit fund?

thanks in advance

dunstonh

1) what it means about a certain amount of money allowed to be placed in it each year?

You cannot pay an unlimited amount into a personal pension. Currently its £3600 a year or 17.5% of your net relevant earnings. Those in final salary pensions and earning over 30k have further restrictions. From April 2006, the rules are being amended to allow 100% of you income to be paid into a pension and obtain tax relief.

2) does it have to be with your current bank supplier?

No it doesn't and given the poor quality of bank products, you wouldn't want it with them either. Even the LTSB Scottish Widows pension is not the full Scottish Widows product available elsewhere.

3) will the pension still be mine if/when i get married as i will have a different last name?

Name change has no impact on your pension. It is recorded under your NI number.

4) does your employer need to know if you are going to have one of these?

No. Although some employers may have negotiated special terms for their employees using a designated provider. You should always enquire to what your employer offers.

5) what is a stakeholder with-profit fund?

Its a style of with profits fund that complies with stakeholder rules. There are only a very small number of providers that offer a with profits fund in their stakeholder profit. Nowadays, you would avoid this fund unless you are close to retirement.

Investing the money is the most important thing with a pension. Yet its the thing which most ignore. If you are not experienced with investments, you should seek independent financial advice.

At age 19, you shouldnt rule out personal pensions either. A number of personal pensions will offer lower charges than a stakeholder pension.

postingalwaysposting

thanks dunstonh, but you have confused me a little more lol

"At age 19, you shouldnt rule out personal pensions either. A number of personal pensions will offer lower charges than a stakeholder pension."

what is a personal pension?

you can tell i am rubbish with these things lol, none of my close family have pensions so i dont have a clue.

which is the best pension for me that i can pay at least 13% of my monthly income into a month, without declaring it to my employer, which i can pay peferably usuing direct debt?

dunstonh

what is a personal pension?

Personal pensions and stakeholder pensions are exactly the same with the exception of charges.

Stakeholder have a defined charging process of no initial or exit charges and an annual management charge that cannot exceed 1.5% for the first 10 years and then 1% thereafter.

Personal Pensions dont have a defined charging struture. Instead it is left to the providers. Different providers have taken different approaches. Some are charging more for little or nothing extra. Others charge in exactly the same way as the stakeholder but have better fund based discounts which makes them cheaper. Others take an increased charge at the start but are cheaper later on making them cheaper over the term.

The stakeholder pension is basically a simple product, often with simple funds and limited features. Its easier to understand but its not always the best.

which is the best pension for me that i can pay at least 13% of my monthly income into a month, without declaring it to my employer, which i can pay peferably usuing direct debt?

I would say a personal pension given your age but it would have to be with the right provider. Unfortunatly, due to FSA and board rules, I cannot mention which providers would be best for you.

To be honest, you really need to take independent financial advice. There is nothing wrong with not knowing. Most dont. However, if you try and do it yourself without knowing what to look for, you could end up with a poor value pension. You just look at how many people went with Marks and Spencers or Virgin for their pensions without realising they not very good.

postingalwaysposting

thanks again dunstonh

what is independant financial advice? is that like a solicitar or something? i was mainly looking at one supplier but that is prob wrong lol.

why is everything involving money so difficult lol

dunstonh

what is independant financial advice? is that like a solicitar or something? i was mainly looking at one supplier but that is prob wrong lol.

Depends on the supplier. If you happen to be looking at the best one, then its not a problem. Chances are it isnt though .An independent financial advisor is someone who can give advice but has no ties to any insurer or provider. They research the best product, present that research and make the recommendation and then if you are happy with it, they do all the work in setting it up.

why is everything involving money so difficult lol

No different to anything else. I have car which costs me money and I can drive it but I havent got a clue how to service it. I get a professional to do that.

postingalwaysposting

where can i find a financial advisor?

the one i was looking at was metioned on the itv lunch time news.

dunstonh

www.unbiased.co.uk

That has a database of all the IFAs in the UK. You can do a postcode search and it usually shows 5 closest to you. There are some filters as well.

I didnt see the news, although I heard a few bits in the background. They did have a number of non-financial advisors on, including Martin.

postingalwaysposting

thanks dunstonh, this has got my brain in gear at last I will try and book to see one soon and open a pension before the new year. thanks again posting