Pension Help (25yr Old)

Bennett_2

Hi all, i've a few similar threads but most seem to be about older people starting pensions.

Ive got absolutely no idea where to start look! But i really want to get something sorted!

Im 25 years old and earn £20,000. I am a home owner (mortgaged) with my wife, we currently have 30 years remaining on our mortgage but we hope to get it paid off within 20years.

Any help would be great.

Thanks in advance!

dunstonh

What you are asking is too specific to give an answer. Your options generally are stakeholder pensions, personal pensions, SIPPs and S&S ISAs. You can eliminate SIPP as that is for experienced investors and you wouldnt be asking if that was you. Your age is best suited for a factory gate priced personal pension rather than a stakeholder but it depends on how you intend to purchase the pension. It also depends on your contribution. You also need to check if the employer has a pension that they contribute to (free money).

MikeJones_2

Hi Bennett,

You're astute enough to browse online and pose a serious question.

Let's start with the obvious - and tease out some useful responses.

Are you employed or self-employed?

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a current member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

Bennett_2

Thanks Mike,

I am employed, but i only work/ help manage a small family run business of 11 people. So no pension scheme is offered.

MikeJones_2

Bennett,

By law, with 5 or more employees, the company must provide you with access to a Stakeholder pension scheme.

In 2012, current proposals are that employers will have to at the very least provide access to Personal Accounts where employees will be automatically enrolled and have to pay 4% contributions topped up by 3% from the employer and 1% from the Government in the form of tax relief. Employees will have the right to opt-out if they wish.

You ought to consider seeing an IFA who will look at your entire situation, consider your aspirations and make recommendations accordingly.

Essentially, you need a 'route map to retirement' with a strategy that will be flexible enough to cope with a change in circumstances.

Mike

I work in the field of Pension Education and Pension Guidance in the UK. I am a current member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.

Bennett_2

Ah right, ill mention that to him (the boss).

But in the mean time if i wanted to start a private pension scheme what should i be looking for? and where do i start? Is any one company better than another? ie. Scottish Widows, Standard Life etc etc...?

Many thanks once again.

Bennett_2

and lets say i wanted to start off by paying £75 - £100 in per month

dunstonh

By law, with 5 or more employees, the company must provide you with access to a Stakeholder pension scheme.

Not any more Mike. That ruling was abolished earlier in the year. Part in preperation for the NPSS and part because the majority of the schemes just existed on paper and not in reality.

But in the mean time if i wanted to start a private pension scheme what should i be looking for? and where do i start? Is any one company better than another? ie. Scottish Widows, Standard Life etc etc...?

You look at how you want to invest, the fund charges, the features you may wish to utilise and which one offers the best to fit those needs.

There is no one-size-fits-all provider or product as you tend to find many of the providers target certain groups.

If you want best advice then you should see an IFA. That will almost certainly be the cheapest option as well considering your age.

Bennett_2

dunstonh wrote: »

Not any more Mike. That ruling was abolished earlier in the year. Part in preperation for the NPSS and part because the majority of the schemes just existed on paper and not in reality.


If you want best advice then you should see an IFA. That will almost certainly be the cheapest option as well considering your age.

Id best not mention the pension scheme to the MD then.

So think I'm just as well to make an appointment with an Independent Financial Advisor...?

dunstonh

So think I'm just as well to make an appointment with an Independent Financial Advisor...?

You have to ask the following questions:
1 - Do I know how the money should be invested?
2 - Do I know what type of pension I should use?
3 - Do I know which provider is the best option to match my requirements.

If the answer is no then seeing an IFA is the best option. Do not under under circumstances see a sales rep.

Bennett_2

Looks like i'll be going to see an IFA then!

Would someone from say HSBC be ok or would he try and sell me a particular product? It's a job to know why to find a good honest IFA, i would normally go on recommendations but not many of peers have seen one. Yellow Pages??

Thanks Dunstonh