new to pensions..age 21

newcastle21

Hi, I'm 21 and just graduated this year about to start my first full time job and I am being advised to start thinking about my pension as I know the earlier you start the better!! My employer does not offer a pension scheme and so I have no idea where to begin to start investigating how to save! Can anyone offer me any advice?

Thanks!

JoeCrystal

Neither does mine but they did point out the stakeholder pension with local company. Maybe reading the contract might have some details concerning this?

Cheers

Joseph

EdInvestor

If there is no employer's contribution, start with your stocks and shares ISA.It has the same investment options and is tax free, but much less restrictive and can be converted to a pension later if appropriate.

jh2009

You are wise to think about pensions as earlier you start then the more time you have to save. Plus if something happens later in life and you cant afford contributions you will have them banked for the earlier years of your life.

Its a shame your employer doesnt contribute. If this ever changes, or you get an employer who will contribute, then you should join immediately.

In terms of the cost of pensions, then remember that with pensions then remember if you pay £100, then if you are a basic rate taxpayer the government pays 20% of thsi cost in tax relief, so it only costs you £80. Any company contribution simply further tops this up, hence why a small contribution can add up with tax relief and an employers contribution.

Theres several options for personal provision.

A stakeholder pension may be best if you dont want to get to involved with investments as it offers a more limited fund range and is easy to set up, run etc.

A personal pension offers more choice than a stakeholder investment wise and is set up on a similar basis.

Altneratively if you want to get more involved with investments, etc, then a SIPP is an alternative.

Contributions in all can be simple one off contributions, or regular monthly ones that you can stop or start at will. Pension providers may have minimum payments such as £20 for a a one off or monthly contribution but any provider you look at will confirm this to you.

For more info then if you go onto a search engine and type in "Stakeholder pensions" or "personal pensions" you should get lots of info from that.

The Pensions advisory service has good website that explains pensions and some of the terms ive mentioned above in more detail. Go to http://www.pensionsadvisoryservice.org.uk/

newcastle21

Thankyou that was really helpful. Do you think going through an independant financial advisor to discuss my options will be more beneficial than going through say a bank or building society?
Thanks

dunstonh

Do you think going through an independant financial advisor to discuss my options will be more beneficial than going through say a bank or building society?

IFA is whole of market. Employed by you to give you best advice. Can portfolio plan and can work on fee or commission basis or combination.

Bank or building society sales rep is employed by bank and most are tied to one insurer or limited panel, work on targets and commission basis, cant portfolio plan, required to give best advice from their product range only or closest match and is one of the most expensive distribution channels for regulated financial services products.