nearly there lol

postingalwaysposting

Right i have decided to enter in to the stake holder pension scheme run with my current employers I have read the booklets over and over and decided its the right choice for me.

now i have one more question and i promise this wil be the last lol. investment funds that can be used on the plan to boost the value: 1) how do they work? 2) whats the diffence between equity, managed and fixed interest funds?

Thanks in advance and i promise i will no longer ask questions about pensions lol

margaretclare

Equity means you're buying 'units' which go up and down with the stock market. In turn, some equity units are more risky than others.

One of the experts will be along shortly! Don't worry - this is not a once-and-for-always choice you're being asked to make now. You can switch within the stakeholder! Depends on how young you are - the younger, you can stand more exposure to 'risky' funds.

I look at my stakeholder account online every day. It's a nice feeling to see it going up, not so nice if it goes down, but overall, the trend is upward.

This is a learning curve and you will learn over time. Don't worry!

Aunty Margaret

dunstonh

FP have some excellent funds and allow (from memory) upto 6 or 8 to be selected. It will say on the application how many. Use up all 6/8 and spread it out so the risk averages out to what you are comfortable with.

Specific fund recommendations are not allowed. However, say you felt you were medium risk. You could pick 25% of the lower risk funds, 50% of the medium risk funds and 25% of the higher risk funds. Therefore you average out to medium.

The FP paperwork usually lists the funds and the risk rating so you can decide for yourself. Mix and match, dont go all into one fund.

EdInvestor

margaretclare wrote:

I look at my stakeholder account online every day.

IMHO this is a very good idea.Whenever you check your bank account, or ISA, or share account, check your pension too.It's what's IN the pension that's important - the funds, or shares if it's a SIPP, not the pension itself.

investment funds that can be used on the plan to boost the value: 1) how do they work? 2) whats the diffence between equity, managed and fixed interest funds?

OK, so you put the money in the pension account.

So now you have to choose which fund it goes into.

"Equity" means stockmarket.
"Managed" means mainly stocks and shares (say 70-75%), but with a bit of everything else as well.
"Fixed interest" means bonds, which are a bit like cash.

If you're fairly young you would normally be told to go for equities and property.In the old days many people would pick the managed fund, but often these haven't performed very well so they're out of favour.

How they work is that the fund manager takes your money and the money from all the other people who pick that fund, puts it together and buys shares with it.The idea is he can buy more shares more cheaply than an individual can, and this lowers risk and costs.It also saves you the bother of learning how to check out all the individual companies whose shares you might want to buy yourself.

Some types of funds contain assets which are very difficult to buy on your own - most people aren't rich enough to buy a shopping mall or an officeblock on their own,for instance.So the fund puts the buildings together in a package and all the individuals like you buy units in the property fund, thus owning a slice in the office block. It's much the same with bonds - you can't really buy them on an individual basis, though you can buy individual Government bonds ( called gilts).

The fund managers charge a fee for packaging up all these assets and buying these shares for you of course, and you always need to check how much the charges are, because if they're too high, most of your profits can end up going to the fund manager, not you.

postingalwaysposting

hi dunstoh, me again, you will never speak to me any more lol :silenced:

I can pick 6 but i was keeping them all at meduim due to my age and years I have left till pension age, but your therory seems better as always .

It says they can be changed at a later date anyway so i suppose it doesnt really matter what ones i chosse as to the different funds. but how do you know if they are doing any good?

margreat said:
"I look at my stakeholder account online every day. It's a nice feeling to see it going up, not so nice if it goes down, but overall, the trend is upward."
how can you do that?

thanks for everyones help

margaretclare

Hi

Have a look at this:

http://customer.friendsprovident.co.uk/products/pensions/;ms_jsessionid=533BUAMD1G1C0CWCDYYCFEQ

Once your scheme is set up you can access it online. You can also switch funds, change your personal details etc online.

HTH

Aunty Margaret

postingalwaysposting

thankyou, thankyou thankyou every one you are all stars