Pension Confusion

jambojen_2

Hi, I am looking for some general help.
I am 20 years old and looking to open a pension.
I have got no idea which type of pension I should go for, how much to pay in monthly, which provider etc…..

i currently have a bank account with the Halifax and have been looking at the stakeholder pension they provide.

I am very money conscious and would like to start a pension now, and any help at all would be excellent. Or if anyone’s in the same situation as me and can shed some light onto what steps they took, that would be brill also.
Thanks
Jen.
x :money:

dunstonh

i currently have a bank account with the Halifax and have been looking at the stakeholder pension they provide.

Never buy your regulated financial services products from banks. Usually they are expensive, have limited options/features, poor fund range and often poor performance to go with it.

At age 20, personal pensions and stakeholder pensions would be most likely the best versions of the pensions available. SIPPs exist but they are mostly for the more experienced investor. Stakeholder pensions are a low cost product with a defined method of charging. Often referred to as the budget product as the fund range is usually weaker than that offered on personal pensions. That being said, a few providers can ofter a relatively good selection of funds within their stakeholder (at least currently they can). A stakeholder pension may not be the cheapest option either. Some personal pensions can be cheaper over the term. Particulary when you have more than 20 years to go until retirement.

So, you need to decide whether you want a stakeholder pension with limited fund range (which would potentially have lower growth on the funds available with many providers) or a personal pension which may or may not cost more but offer a better fund range. Of course, if you go with a personal pension and pick only stakeholder funds within the personal pension, then you have in effect given yourself the best of both worlds by having the same charging structure but the option to utilise external funds at a later date.

jambojen_2

Brilliant, well thats a place to start then.

I need to look into providers etc. i have no idea about that at all!!

I only thought of Halifax as i thought it would be easier as im already with them, but i guess thats what they are hoping people will think.

i am working full time, and am on decent pay so i can afford to pay a little bit extra for a better pension.

i wish i could sit down with someone and tell them what im after and have them do everything for me!!!!!
lol.
stressful.
thanks, for your help!

cheerfulcat

i wish i could sit down with someone and tell them what im after and have them do everything for me!!!!!

Then go and see a [fee-based] IFA; that's what they're for!

Have a look here, for some basic info about choosing a pension.

Cheerfulcat

dunstonh

www.unbiased.co.uk is a database of 90% of the UKs IFAs. You can search by postcode and find your nearest ones.

CC mentions fees. However, if you are just starting off with a relatively small contribution, you may find that the commission option (i.e. you dont pay the IFA, the product provider does. However, you pay full charges for that) is more cost effective in the short to medium term. It should be noted that the banks always put you on full charges anyway so had you gone down that route, you would have noticed any difference.